Faulty Motherboard?

Some friends of mine are having problems with a computer that I built for them over two years ago. They brought it back to me, and I got to get this thing fixed. Here's what happens.

When I turn on the power, everything sounds like it is booting up ok but no picture shows up on the monitor and the led's on the keyboard for scrn lock, num lock, etc, all stay lit and never go out OR they don't come on at all. Any mouse or keyboard that is plugged into the PS/2 ports are unresponsive. I dug out an usb mouse and the computer recognizes that. After waiting for about five minutes after turning the computer on, I am able to move the mouse around, sometimes needing to reset the usb connection to the back of the motherboard, and the ASUS loading screen shows up on the screen where it pauses for another five minutes. Eventually, windows loads, but the keyboard is unresponsive and I have to use the on-screen keyboard to type anything. I don't have a usb keyboard to test.

Once windows is loaded, none of the processes start, ie the status bar at the bottom right corner is empty and the computer doesn't recognize the built in Ethernet connection so I can not try to update anything.

With all the problems I am having, could I have a bad motherboard? I believe ASUS has a 3 year warranty and it would be great if I could get another board and swap it in. Or am I overlooking anything?

Here is the system's specs:

ASUS A7N8X-VM/400 Socket A
Anthlon XP 2000+
2X256 CORSAIR Value Select PC3200
WD 80GB HDD
Integrated Graphics
Windows XP Pro

Any help would be greatly appreciated! Merry Christmas!

 

Tried refreshing CMOS by taking out the battery for a minute?

 

Yeah, I tried that and no improvement. I'd like to reinstall windows but I can't do that without keyboard support.

When the mouse and keyboard are in the PS/2 ports they get power because the optical light on the mouse lights up and the three led lights on the keyboard light up but never go out. However, the computer does not recognize them and I can not type or move the mouse around.

If I use a USB mouse, I can move and click, but I don't have a USB keyboard to test out.