WD Diagnostic tool sees all the data intact on my HDD.
It also shows that the NTFS partition is ok.
But XP wont boot to Desktop, before than it restarts.
This 1 year old HDD showed bad SMART in POST.

Which tool now I can use to recover the data? Hiren's boot cd? Which tool?

If you see your data on the drive and your windows in corrupt then you have a chance to pull your drive, attach it to another PC with an external usb enclosure and see if you can get your data off your drive this way.

Other wise you will need to clone this drive and not work on it, install a recovery program inside another PC and attach it via usb external enclosure. After run the recovery program to get your data back. Get Data Back NTSF is a good one to use but you will need to purchase this in order to get your data back.

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Iorana Haraharaini