XP will not start

My wife's computer stopped working tonite. She was in a furniture website and was trying a program that changed the fabric on a chair. This caused Explorer to stop. She got an error message saying she had low memory. She closed out of those programs and the system started rebooting. Now the system will not start at all in any mode. Normal startup shows the Windows XP startup screen and stops there. Safe mode shows many files loading then stops.
I used my install disk and went into recovery mode. I ran chkdsk and it found one error and fixed it. Still no luck. I tried repairing the installation. That also did not work. I am at a loss. System has XP Home Edition SP3. Please give some recommendations.

 

Sometimes knowing the last file that safe mode loads is helpful. Post that in case it has a name that someone might recognize.

 

The last file to load in safe mode is:
\windows\system32\drivers\Mup.sys