I thought this might be useful for others encountering a similar problem that I encountered yesterday.
A friend called and said their computer wouldn't start (Windows XP & SP2). I went over and it was in a continuous loop. It always went to the optional startup screen. It wouldn't start in Safe, Command Prompt, Last Known Good, etc. It always came back to the optional startup screen.
It looked very hopeless so we opted to restore the computer. However, restore wouldn't work either. When trying to restore, the computer locked up at the beginning of the restore process. I tried several times.
With no other options, I decided to take his hard drive home and "slave" it to my Win XP computer. To my total amazement, my computer's Win XP (also with SP2) detected the "slave" drive and proceeded to check it before allowing it on the computer (although I could have bypassed this option). After completing what appeared to be similar to the old "Scandisk," Win XP had found tons of files that were corrupted and cross-linked on the "slave" hard drive, and repaired those files.
It put all the files in a separate folder. Upon examining the files, they were all temporary Internet files.
I set the hard drive back to "master" and tried it again in my friend's computer. Low and behold, it worked flawlessly and nothing was lost!
I don't know what caused the files to become corrupted. I did a complete virus scan and Spybot search after getting the computer up and running. No viruses, but tons of spyware (which I deleted).
Thought I would pass along the info in case others have the same problem. The only suggestion I could give my friend was to delete temporary Internet files often and run Spybot often.