Run gparted -- listed in Mint's menus as "Partition Editor, or start in a terminal "sudo gparted" -- to see if WinXP's partition is still there (I'm assuming it will be there still). It will be the first partition listed. Then check your /boot/grub/menu.lst again to make sure the commands are correct. The commands that are needed are listed in the first section of the menu.lst file; all the examples start with a # or ## sign.
I haven't been following MS's battles lately on their fight against pirated copies so I don't know if they can "turn it off" or not. Last I heard they just put up nag screens but that may have changed. One way to see if the problem is MS or not would be to install Virtualbox in Mint and install Windows XP in it. That won't help your gaming needs but it would tell you if you are indeed being blocked by MS, all without having to touch your "real" XP installation.
Can you post here any error messages or error numbers you are getting? I would need to know if this is a grub problem or not.
You might also try Cedega for gaming. http://www.cedega.com/
They have a database of games they support. I think it's just $5/month and apparently their support is excellent, though I've never tried it myself. Then you might not need Windows any more at all!
I would try the Virtualbox thing first. If that works ok, you can always re-install MS's bootloader and see if you can get XP to work. That requires your Windows installation disk. Post back here if you need instructions on how to do it. The only problem with that is you won't have access to Mint until you install grub all over again. And again, if you choose to go this route, post back here again for instructions on (re)installing grub.
Good luck! Let us know how far you get