Before the reinstallation, my laptop had Stand By option. However, after reinstalling Xp, Stand By button appears disabled. I opened the Power Option Properties dialogue box, there is neither Hibernate tab nor Stand By tab available.

Power management features—in particular standby and hibernation—rely on device drivers that support power management in addition to compatible hardware. In particular, incompatible video drivers prevent these features from working. The built-in VGA driver, for example, is a bare-bones driver that doesn't support power management.http://www.microsoft.com/windowsxp/using/helpandsupport/learnmore/tips/nostandby.mspxAs you've just reinstalled Windows XP, then install an updated driver for your display adapter.TaurArian [MVP] 2005-2010 - Update Services

This fixed my problem. Stand by was available after I rebooted. I then was able to go into the power options, click on the Hibernate tab and "enabled hibernation". Can hibernate by holding down the shift key and stand by changes to hibernate. Thank you!