Ok, I really didn't have much hope that a registry restore would fix this anyway.
In W98 and all subseuqent version of Windows, your Desktop and Windows in general uses InternetExplorer as it's Shell. When ever you have problems with the Desktop, Taskbar and/or Explorer errors at startup, it usually means a portion of IE is damaged. The scandisk could have easily caused it by "fixing" the drive. This is what I suggest you do
Boot back to the "Safe Mode-Command Prompt". Then type in Edit c:\windows\system.ini and press enter. Now change the line that reads Shell=Explorer.exe to Shell=Winfile.exe
Now press the ALT key and then use the down arrow to highlight "Save" and press enter.
Now press alt/ctrl/del to restart the PC. If it boots to FileManager click on File>Run
Key in c:\program~1\intern~1\setup\setup.exe
Click on OK and follow the prompts and complete the setup routine.
If that command doesnt work try this
c:\program~1\intern~1\ie5setup.exe
Click on OK and follow the prompts and complete the setup routine.
Now Restart the PC to a Command Prompt again. Then Edit c:\windows\system.ini and change the Shell=Winfile.exe back to Shell=Explorer.exe and save the changes. Now press alt/ctrl/del to restart the PC and let it boot into Windows.
I'll try to hang around for a few minutes to see how you make out.