First, if you can access the options in Safe Mode, try using System Restore to a time when the computer was working correctly.
If that is working, have you tried restarting into Safe Mode, then log in as a different administrator account? (Although you didn't mentioned it, if you're using XP HOME, there is a "hidden" administrator account that should be accessible for any potential repairs.)
If it's possible to acces the Control Panel, you could create a new account and see if it's working correctly.
Hope this helps.
Today when I started up my computer my desktop never loaded. I used ctrl+alt+del to access the task manager and the explorer.exe task was not there. I tried to run it and it would instanly close. The desktop is blank. I have to run everything from the task manager. I restarted in safe mode and the desktop still does not show up. Does anyone know how I can fix this? I have Windows XP on my computer.