Thanks itimpi for your help. I searched MTP support and found a link to Microsoft download center and downloaded a Media Transfer Protocol Porting Kit. I also updated Media center to the newest one. The Porting kit changed the way the Kindle shows in "my computer" and now I can just open it to the book folder and it lets me copy my mobi files with no problem. Here's the MS site for the download for anyone else with Windows XP having problems with the Kindle Fire.
Thanks for the help. I hope it help someone else.