Hi, sorry it's been a while.
I have taken a couple of screen shots and found when the recovery cd is running, it's installing USB Keyboard files but, as soon as I get to the screen in post #1 they keyboard is frozen, lights are on but, nothing happens.
The Keyboard and mouse combo is a Logitech Cordless Dekstop LX 700 and during any other part of the navigation around the screen, on the pages/screens before this WinXP Pro setup page, it's just fine.
Only when I want to press ENTER=Continue or R=Repair or F3=Quit it does not work.
Do the screen shots help ? (screen shots via camera)