Vista boots to black screen and moveable mouse cursor

I'm trying to fix a friends computer but can't seem to figure this out and am trying to not reinstall windows if I can help it. It's a Dell Studio laptop running Vista. When attempting to boot, after the scrolling green bar I get a black screen and the mouse cursor. At which point nothing works and Windows never loads. I've downloaded a recovery cd and tried to repair but it didn't work. I've also tried fixmbr at command prompt. I can get a linux livecd to boot just fine so I am assuming it's Windows that's screwed up. Any help or suggestions would be greatly appreciated. Thanks.

 

I tried that and still got the black screen. Also, tried a restore to previous point but none existed.