xp shell32 problems

Helping a freind with pc and it presenting some interesting errors-
The system boots fine and goes to log in screen. When under any user profile certain shortcuts and programs do not load the arrow just sits there. under one profile it gives me a shell 32 error and closes down the pc after warning.(both accounts have admin privelages) on the other profile it will read the cd in the tray but will not load any programs from it...very strange
I am not a pro in xp so mabye i am missing something- even tried to repair the install with the dell recovery disc(no go main menu lets you make selection then just goes away no hd light etc. Is he Hosed or is there a way I am missing

Basic dell dimension2400 2.0 ghz
256 memory
40 gig hd

Thanks