Boot to safe mode and log in as administrator (no password unless you created one) and see if you can create a user from there. You should also be able to change logon requirements to bypass the welcome screen.
When I start XP Home I get to the part where you click on a user to log on, only the users are gone. No icon, no user name, just emptiness. Can't get to XP or anything. Was working great one day and this the next. Any ideas short of a reinstall??