As I have spent some time resolving the problem, I’ve decided to share the solution with you.
I have bought my MSI Wind as soon as they were available in Poland, in July last year. It was quite some time ago, so I decided to update BIOS. I downloaded it from MSI official page, prepared bootable pendrive using HP USB Storage Disk Format Tool (downloadable from here) and Windows 98 boot files from my own archives (you can find some boot disk images at bootdisk.com). After extracting BIOS files to the pendrive, I’ve booted system from it.
First trail of running flash.bat failed with message “ERROR: BIOS has no flash information available“, and it appeared that I have to have an AC adapter connected throughout BIOS update procedure – quite obvious, but I forgot about it. First reboot, everthing went fine, Windows XP found some new device and that was it. But I’ve also updated some drivers which required system to reboot, so I did.
And system did not start after reboot – it all finished at the black screen with XP logo and animated slider. Safe mode also didn’t help – all I received was black text-mode screen with blinking cursor after loading drivers.
My first thought was that some new driver was not functioning properly, so I decided to try to repair system using Windows XP install CD. I spent two hours struggling with creating XP installation pendrive (as I don’t have external CD drive), but with a partial success – now I have XP setup pendrive, but I didn’t solve my problem: Windows installer hung with “Setup is now starting Windows” message. I thought that maybe even SP2 install needs SATA drivers, so I built another installation drive using nLite to include Wind driver pack, but result was the same.
After some googling I found hints to try to go through BIOS settings and disable unnecessary things, and that was a bullseye. I got into BIOS setup and first thing I seen was a message “I you have changed overclock settings and system is not booting, try to unplug AC adaptor, remove battery, reattach battery and AC adaptor and try again”. And that was it. System booted smoothly.
I hope that this will save some trouble if anyone encounters problem like I did.