$MFT is the Master File Table for the NTFS file system. This is not a good thing for you unfortunately. If CHKDSK is unable to repair it, the problem is only going to get worse. It will write temp files all over your drive and eventually destroy data.
First thing first: Save any data you can off the drive. I'm unsure if this error lets you fully boot, but if it does, dump your data to something... anything. If not, use a bootable CD like BartPE or a linux distro that can read your data and move it somewhere safe.
You can try to use the repair function on your XP disc, but I haven't read of many success stories doing that. The only answer I've ever seen that truly "fixes" the problem is a full reinstall of XP... which is obviously a PITA.
Sorry.