Solution turns out to be very simple.
You need boot-able distribution disc with OS on it (in this case it was XP, but I think it is good for W7 and maybe Vista, also).
You boot up from the disc.
Go to the Repair Console (which will be a DOS prompt.)
Copy NTDETECT.COM and NTLDR and boot.ini to the C drive one at a time.
then, reboot from you C drive as you normally do.