*You can try booting into the repair console on the CD and run chkdsk on the drive.
*You will notice it has a problem in the beginning clusters
*The system may have a virus run the virus scan and other malware utilities to see if you can troubleshoot error.
*When booting system press F8 and use safe mode to run scndisk on the system,you should be able to run your anti-virus from here also
If winlogon is corrupt, you cannot logon in safe mode either.
Are you getting a WinXP background screen with no icons or taskbar? If so, press Ctrl-Alt-Del to bring up task manager and run explorer through task manager. Post results.
Do the following disconnected from Internet.
If you have WinXP install CD, boot from it and run the install. When XP installation screen appears (after several minutes) see if you have option to do a REPAIR INSTALLATION. (Am not referring to recovery console). If Repair installation is option, do an overwrite install. As soon as possible after installation, boot into safe mode and run msconfig. Choose Selective Startup and uncheck Load Startup Items. Reboot, install a recent version of Ad-Aware or Spybot and remove what malware you can. Run a virus scan.
Reconnect to internet. Install other ad-ware removal program not previously installed. Update definitions and run both.
Keep running adware removal software until you get clean scans in both or they show VY Better Internet or Cool Web Search left. You may need specifig removal tools for these. Search for CWShredder, Cool Web Search removal, and Better Internet to locate removal tool (site changes).