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Try running restore.
I had a similar problem - one of those stupid windows updates - was a con by microsoft - tells you have problems but to get rid of them you have to pay to get the full version and wouldn't let me out of the loop.
Easy fixed - control+alt+delete and then when XP had rebooted I did a Sophos Virus scan - found NOTHING !!! so did a RESTORE to a prior restore point and no more problems.
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