Hi,

A quick search on Google about "lsass.exe system error" reveals several possible scenarios. Virus/malware, damaged hard disk, registry errors etc.

Since you are unable to boot into safe mode or normal mode, I would suggest you try booting into recovery mode with the Windows XP CD.
But if I remember correctly the Aspire One doesn't have a CD/DVD drive, you can try plugging a usb CD drive if you have one.

If you don't have a USB CD drive, you can use a USB flash drive:
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Else, try this method:
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If it fails, you have no choice but to format the hard disk. Use Acer erecovery console to restore it to factory defaults.

Detailed instructions given here:
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