Recently, I too was getting blank screen just after windows logo page showed during boot process. The difference is that I am running Nvidia graphics driver, not ATI. (Win XP sp2 on a HP desktop with Nvidia GeForce 6150 LE graphic driver).
The following seven step fix worked for me:
1)Started computer in safe mode.
2)From 'run', entered 'msconfig', from 'boot.ini' tab, checked '/BASE_Video' box.
3)Successfully rebooted computer in normal mode and noticed that system boot and speed ran perfectly (although graphics settings were bare bones).
4)Logged into HP driver download site and downloaded the graphics driver that originally came with my computer.
5)Installed original graphics driver.
6)Entered 'msconfig' again, and unchecked '/BASE_Video' box.
7)Restarted computer in normal mode.
NOTE: 'Rolling Back' the graphic driver from within device manager, did not fix the problem. I had to completely reinstall the original graphic driver, that I downloaded from my computer manufacturer site.
On a side note, about 'system restore'.
I recommend leaving system restore enabled. Because, if you do get a virus, just disable 'system restore' before you clean the virus. After cleaning virus, re-enable system restore. System Restore is a nice tool to use from time to time. For example, before I install any software or updates, I usually create a system restore point in advance.