My IBM NetVista does the same thing at times. When it happens I boot to a command prompt (safe boot and choose command prompt) and type in scanreg /restore I then pick a date before the failure. Works perfectly. I don't know why it happens but the above fixes it. Sadly only until the next time, but it is fixable.
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On my Gateway Pentium II, 350 MHz, Windows 98 PC I ran a defrage last night. Everything was fine, and the defrage completed successfull (in safe mode). Today when I boot up my PC it is displaying in 640x480 16 color mode. I can change the setting (to 256 color and 1024X768 or 848x480) and Windows tells me I need to reboot my PC for the changes to take effect (even though I have it set to make changes without rebooting). So I reboot and it comes up in 640x480 each time. I am not getting any error messages, and everthing else seems to be running fine.