I think you probably have some serious file and disk corruption.
If you can get to the "recovery console" you can try running
chkdsk /r http://commandwindows.com/recovery.htm
If you have an XP install disk with SP1 or later, I'd also recommend creating a boot disk which will at-least allow you to save personal data.
http://www.ubcd4win.com/ However if you can now boot in Safe Mode, you can try a "clean boot"
CLEAN BOOT TROUBLESHOOTING technique
First, restart in Safe Mode if necessary -- (tap the f8 key promptly on startup and choose the Safe Mode option from the boot menu) or Normal mode
Then:
Run
msconfig and select the "Services" tab.
Check "Hide Microsoft Services" and then disable the rest. Also uncheck "load startup items" on the general page.
Now restart and test the issue at hand
If no problems, run
msconfig and recheck half the disabled items on the Services tab. Test again. If the problem recurs, UNcheck half the items you just checked to narrow down the culprit.
If the problem didn't occur, check the other half, so all the Services are enabled -- proceed to do this on the startup tab as well.
Get the idea? You want to isolate the problem to a specific startup if possible.
Note: if you already have items unchecked under msconfig > startups and are in “selective” startup mode – you should note what these are before beginning. They will need to be de-selected again.
http://support.microsoft.com/kb/929135/en-us >> writen for Vista but applies just as well to XP