virus maybe? my computer did something similar to this..... but the mouse didnt load! i had to format
....
i think it may have been that sasser worm or doom something or other... (something like that wasn't it?)
also, i downloaded this cd image called windows xp live.... u write it to disc and change the bios to boot from cd instead of hard disk... it loads a really basic windows, but at least it lets you backup files etc. before formatting (if the hard drive isnt corrupt)
EDIT: im not saying that the problem i had is the same, nor am i saying to format it.... just some spare information...
i think the xp live would come in handy if all else fails though.