PSU problem causing windows\system32\config\system is missing or corrupt in windows XP

Hi,

Built a pc for a friend, Athlon 1700+, 128mb, Asrock MB, 60GB HD, 8mb S3
graphics card, Windows XP Profesional. The system ran well for 6 months then
windows gave the error as per subject. Followed the instructions on Windows
support and recovered the OS.

A couple of days later he said the scan disk would run every time he started
the pc even tho it was always shutdown properly, then the above error
happened again.

I have ruled out virus, software problems etc, and scanning the HD has not
shown any problems, however the floppy drive has been giving read errors
with disks that I know work on other systems.

Anyway looking in the BIOS I notice the power readings are slightly low:

+12v is alternating between 11.77 and 11.90
+5v is alternating between 4.78
+3.30v is alsternating between 3.26 and 3.28

VCore is 1.70-1.71

Is this normal or could it be causing the symptoms above.

Just as I`m about to send this I now find the ON/OFF switch on the front of
the case will not power up the PC even tho the power LED is on, I have to
try several times, maybe it`s looking like the PSU is the problem.

Any help would be much appreciated.