HP 550 XP SP3 freezes after login at desktop

Good morning,

Three days ago, my HP 550 notebook froze up while browsing and required a hard shut down.

When it restarted, the startup process froze as the quick icons were loading in the lower right corner (just after the Windows Update icon appeared.) I could move the cursor, but could not select anything.

This problem has persisted since then and will not start up in normal mode.

I tried booting in safe mode but could not get past the login screen (no admin ID or PW.)

I am able to boot in safe mode under Directory Services Restore mode and have installed/run CCleaner, and then tried Lavasoft Ad Aware which will not install properly due to a missing component (MS Visual C++ for SP1 - I tried to install that directly from MS but it will not install.)

I don't know if this is a virus or not, but I cannot start up in normal mode. Also, when I try to open MS Outlook 2007 from Safe Mode (DSR) it freezes. I am able to get online and use the Internet, which is what I'm doing right now.

Any advice would be greatly appreciated. Thank you.