Enhanced USB support for USB 2.0 only came with sp1 and a couple of other versions of XP such as tablet. If you can direct the installation to the correct place then try it. If you can skip this part then skip and reinstall USB 2.0 support after the repair.
If you can do without any USB during the installation then you could try disabling USB in the BIOS setup and then the installation shouldnt look for the drivers during the installation. The only other thing I can think of is to run the repair from an instalation CD onto which you have "slipstreamed" sp1.