I was having the exact same problems as some of the previous entries. No MS background, desktop icons highligted and unable to boot into safe mode. My system runs continuously through a cable modem with a netgear wireless system. SSID is hidden and non default IPs are used for computers and the router. WEP was up and running. I followed a previous thread, downloading and running all the malware detection/correction programs to include cclean, spysweeper and about five others I cannot remember. Everyone of them found something to correct. Everything was looking great for two days when I got up and logged back into my computer. All I got was the selected desk top, no start menu, icons, nothing. I tried to reboot in safe mode. The system would look like everything was going to work but would then reboot itself after either logging in as any user or administrator or after letting the system completely stabilze (waiting for no hdd light activity). Since I couldn't get back into the system I attempted a windows recovery. It worked and I logged in and immediately started to apply the security patches. First set went well, then MS suggested I install SP 2, it was on the system before, so I did. After that install the system would finished booting into any user or the administrator in any mode. So back to the window repair. Everything looked good until the 34 minute point in loading windows. It provides an error indicating that it "can not find the entry point to IMUS because msdart.dll" isn't loaded. On top of this error is "nregmp2.exe".
What is next? New install? Waiting for your hopefully positive outlook and help.
I can't do anything on the system or provide you any log files since the system isn't using FAT.