Windows XP Home Safe Mode Only????

Hi all this is a problem my daughter has on her PC it came from PC World with XP pre loaded no Windows disk just a built in repair system. It looks like somesort of virus but both Norton and AVG Free say it has a clean bill of health. If you use the reformat/repair system ( 2 options somethig like major or minor repair) the pc will run all day perfect. Shut it down and start it again next day wont bootup except in safemode. Tried system restore and running anti virus with system restore disabled so you get a full scan but no luck, im thinking whatever it is is inside the windows partition ( from where you reinstall your xp from) but how do you virus check this?
Hope somebody knows the answere to this as its been doing this for about 2weeks
Thanks in advance

PC Spec
Windows XP home
2Gig CPU
512 Mb Ram

 

This MSKB article may help;

http://support.microsoft.com/kb/308041/en-us