login help needed

really need help.
os is windows xp
computer boots normally to login screen.
at the login screen are her 2 normal choices for logging in and after clicking either user account she gets the password field
however, there is no cursor and she cannot type anything into the panel with the keyboard.
she can, however move her pointer with the mouse.
she is deadlocked at this point, as nothing happens.
I have had her go into safe mode(using the f-8 command) and she can log in and access windows and most of her programs as normal. any ideas on how to troubleshoot this or fix it?
this is an HP computer that came with a wireless keyboard and mouse 2 yrs ago. keyboard failed 1 month ago and replaced with a brand new ps/2 keyboard at that time. Has been working fine for the last month
been into device manager and all hardware is ok

 

System Restore

 

studiot
thank you
thought there might be a simpler way but, problem solved. thank you.

 

Best way to fix a registry problem unless you are very very sure.

Hope you set a new restore point when it was all working again?