I have a logitech mouse and the exact same thing happened. What hangs it up is when it's trying to reconfigure while windows is loading. I think if you'll open it in safe mode (maybe more than once to get it completed) you'll get it straightened out.
It's still got a bug or two...and I think it's from the logitech auto update feature. I purposely told it NOT to install that, and I noticed it did so anyway.
But try opening windows in safe mode, and if it finally does load, then run a scan-disk just to be sure.
I had some problems w/ Win ME so I reformated my hard drive and reinstalled Win ME. I reinstalled about six of my programs and did all of the Windows updates. No problems. I then installed the drivers for my Logitech Mouseman Wheel. I went to restart and the screen went black as always but then all it did was have a blinking cursor in the upper left corner. I manually shut off the computer and restarted. No problem. I uninstalled the Logitech driver but the problem still exists. Any suggestions as to what to do next? Thanks.