Not sure what you mean by running XP mode.
When you do a hard reset, your vera needs to have internet access, What it tries to do is to update itself to the last released firmware. If it can't find the firmware to upgrade to, it will hang or try to start with the firmware currently on the unit. In the process, it reboots quite a few times. First after wiping out all custom settings, and downloading the new firmware, then after the firmware is updated and sometimes another time, I am not sure why.
Firmware upgrade is usually pretty painless, and takes only a couple of minutes. Downgrade on the other hand can be very painful. I would contact support if you cannot resolve it.