Have a look to see if your hard drive already contains a Hibernation File -
c:\hiberfil.sys (Presuming your WindowsXP is on C:\) Note that the file
is both Hidden and a System file. Running the command dir c: /as from a
command prompt will show it.
If it's there despite Hibernation currently being disabled, delete it and
then try enabling Hibernation. If you can't delete it, check you have Full
Control security permissions on the file. If still you can't remove it, try
booting to the recovery console and removing it from there.
If the file does not exist, check you have enough free space on that
partition for the file - you will need as much free space as you have RAM.
Arun