After the first BSOD, the system tries to fix itself. This effort was very simple in XP, but as the OS has been improved it's become much more effective. Quite often (at work) we find systems that have had BSOD's that the customers never even mention.
If the system can't fix itself, then the BSOD's are likely to reoccur.
Most (90+%) of BSOD's are due to 3rd party (non-Windows) drivers.
The next most likely cause is hardware problems.
And the least likely is Windows problems (because Windows has built in correction methods to prevent corruptions in drivers)
As for damage to the system, Windows is designed to "fail fast" in order to prevent damage to your system. This is one of the reason's for the BSOD - it's to notify you that...