- A corrupted Windows activation
- Virus/spyware infection
To resolve this, you'll be needing your Windows setup CD. Boot into Windows setup and logon with Recovery Console. Resources abound on how to do that so just Google for it if you don't already know how.
Next, backup your current registry hives as any sane human being would (and should):
C:\Windows> copy C:\Windows\System32\config\software C:\Windows\system32\config\software.bak
C:\Windows> copy C:\Windows\System32\config\security C:\Windows\system32\config\security.bak
C:\Windows> copy C:\Windows\System32\config\default C:\Windows\system32\config\default.bak
C:\Windows> copy C:\Windows\System32\config\sam C:\Windows\system32\config\sam.bak
C:\Windows> copy C:\Windows\System32\config\system C:\Windows\system32\config\system.bak
Then, you can "restore" the registry from an initial copy which Windows XP had made after first install of Windows.
C:\Windows> copy C:\Windows\repair\software C:\Windows\repair\software
Exit the Recovery Console, and you should now be able to boot into Windows. Once inside, the first order of the day would be to run regedit. Browse to (and highlight) the HKLM\Software key, then import the backup of software (C:\Windows\System32\config\software.bak) back into the registry. This may take some time depending on how big your software registry is.
Once that's done, do not reboot just yet. Still in regedit, head over to HKLM\Software\Microsoft\Windows NT\Winlogon and edit the UserInit key to read C:\Windows\System32\userinit.exe,
In case anybody's wondering, that comma should be included.
Make sure that userinit.exe really does exist in \system32 before you reboot, then reboot and everything should be back to how it was. Just be sure to run your system through a barrage of antivirus & antispyware scans; Just In Case.
As for the corrupted Windows activation, the only resolution I've found so far is to do a Repair install over the current installation. If that doesn't work, then you're royally screwed. Basically, just grab whatever files you can out of the hard drive and start over with a clean slate.