Walter, 2 things:
1. It's easy to fix.
2. If you do something wrong while fixing it you will need to be able to find a way to edit one text file without booting windows normally.
OK first of all you're seeing the message because you did not install over the previous copy of winXP, instead you installed a 2nd copy. The "damaged" copy is still taking space on your hard drive, but if you've got plenty of free space left that's no big deal.
To prevent Windows from displaying which operating system to boot to, you need only edit one text file, called boot.ini
(which is located in the 'C:\' folder). However, it is a protected operating system file. To see this file in Explorer you have to first tell windows to show protected operating system files.
Here's a quicker way to get to it: Click the Start button, then click 'Run'. In the window that pops up where it asks you which program or file you want to open, type the following..
That opens the file in Notepad.
Within the file, under the [operating systems] heading, there'll be two lines something like..
multi(0)disk(0)rdisk(0)partition(1)\WINNT="Microsoft Windows 2000 Professional" /fastdetect
multi(0)disk(0)rdisk(0)partition(1)\WINDOWS="Microsoft Windows 2000 Professional" /fastdetect
If you remove the line which points to the damaged XP installation, it'll get rid of the boot-up menu.
Which of the 2 lines to remove I can't tell you for sure without looking at your system. However, the first time Windows XP is installed it goes to the "\WINDOWS" folder by default, so it's a reasonably safe bet that that's the line to remove (as it was the first installation that's fouled up now). The second line, which you should leave well alone, will point to a folder with a name similar to "WINDOWS".
If you could copy & paste the entire contents of your boot.ini file to this thread I'll take out the unnessessary line & post the full text of what the file should have in it.