I am also having the error and BSOD and not able to start except with the CD and going to recovery. I looked at the other post, tried those fixes. I couldn't get Dr Watson to run either. In recovery mode, I saw in the windows directory that windows update KB929338.log had appeared when the computer was shut down last time it worked. The log had lots of errors in it. So, I did the uninstall, thinking this update is evil. The uninstall seemed to work, but the c000021a error and BSOD still happens.
The error message includes :Windows logon process terminated unexpectedly with a status of 0xc0000135 ((0x0000000 0x0000000). The Windows KB article 156669 has a different status code--I would guess this mean something different from what that article describes.
The computer is dell optiplex gx260, from Oct 2002, came with WindowsXP and we have done the updates (which I gather may be the problem).