It's hard to diagnose the exact cause of the error without knowing more about your system.

According to MS the error code itself means nothing, but if you break it down it can fall under two or 3 categories. 1 is desktop managemant software. Do you have any?

The other main one is Hardware Accelaration and drivers for graphics cards.
You may have outdated or corrupted graphic card drivers. Did you recently update drivers?

My first guess would be that your system may be failing, I take this from the fact that you mentioned you were having other errors previously.

If you have desktop management software then try these steps;
1. Restart the computer. Press and hold down the CTRL key until the WinME Startup menu appears, and then choose Safe Mode.
2. Click Start, point to Programs, point to Accessories, point to System Tools, and then click System Information.
3. On the Tools menu, click System Configuration Utility.
4. On the Startup tab, click to clear the check box next to DMIStart.
5. Click OK. When you are prompted to restart the computer, click Yes.

You mentioned you could get into safe mode, do you get any errors in safe mode? You could try turning down the hardware accelaration.
1. Click Start, point to Settings, and then click Control Panel.
2. Double-click System.
3. On the Performance tab, click Graphics.
4. Move the Hardware Acceleration slider to the None setting.
5. Click OK, and then click Close.
6. When prompted to restart your computer, click Yes.

Post back here after trying these. Also how far back did you restore, can you go back further?

Thank you for your help. I will try your suggestions and see if that fixes the problem.

Here is some further information that may help to diagnose the problem. Every week I run Scan Disk and Disk Defrag as scheduled tasks. Last night niether ran. There was a message on my machine this morning telling me that Defrag could not run because there are errors on my hard drive that need to be fixed first. When I try to run Scan Disk, it keeps restarting and I eventually get a pop-up message saying that it has restarted 10 times. How do I get Scan Disk run through the complete process?

Thanks again for your help

I have been doing some more research on the problem I am experiencing and came across this info on KB891711.exe

http://www.windowsbbs.com/showthread.php?t=42672

The problems described in this thread sound very similar to what I am experiencing when booting. Anyone have any further information on this? I have used the System Start Up Menu in Spybot and unchecked this program so that it does not run on start up. I see the KB891711 Update listed in Add/Remove programs. Is it okay to remove this Update?

Thanks for any thoughts on this issue.

Delete it and download again as the new update is fixed.