I don't think Leopard can do anything to your Windows partition, so I'd say NO, the drivers didn't get updated automatically, though the Boot Camp Utility definitely was. There shouldn't be any problem with running XP through Parallels or VMware; I've installed drivers through Parallels. But it's not necessarily a driver problem. It sounds like a goobered boot record or something like that.
The fix for this is a "repair installation" of XP.
Here are the instructions for doing this. Easy to do, doesn't destroy your data or installed programs, probably good for your teeth, too.

Once you've done this, you'll have to install any current fixes and updates, and then install the drivers (simply insert the Leopard disc; they're on it).