i have not studied all written here, but this link worked for me:
http://www.tek-tips.com/viewthread.cfm?qid=924408
I suspected HellzLittle what ever caused it and when I just ran spybot it's there again, so i googled it and found all you folks trying to get a fix. I don't know if it'll work for you, but it did for me. I did not have a bootable CD either. I just renamed the software hive per below, added userinit value (mine was blank) and then put original registry back. Pls don't bust my chops - I'm an old guy that has little experience - and may have taken a bad risk - but i had no important info on this home xp computer. happy 4th.
Here's paste from above link.
" Here is a second approach to making the computer bootable:
(from the LavaSoft forum)
First things first get to recovery console.
At recovery console, we need to replace the software hive with a previous good backup. It should look something like this:
C:\windows>cd system32\config
C:\windows\system32\config>ren software software.old
This renames the current software hive to software.old
C:\windows\system32\config>copy C:\windows\repair\software
It should say "1 file(s) copied"
NOTE: After the next step you will want to remove the cd, then boot into safe mode. If you do not boot into safe mode in Windows XP it may prompt you to reactivate and you may not be able to get into Windows.
C:\windows\system32\config>exit
Now hit the F8 key and boot into safe mode. Logon to the administrator account when you reach the welcome screen. Hopefully you will be able to logon.
Now we need to edit your old registry to change the path to the userinit.exe file:
open regedit.exe
Highlight HKEY_LOCAL_MACHINE (note: this is important, if you do not highlight this the next step will not work)
goto file - load hive...
Now select your old registry file which should be in C:\windows\system32\config\software.old
It will ask you what to name it, if you don't understand, just type "test".
Now navigate to the following:
HKEY_LOCAL_MACHINE\<what your named this in the previous step>\microsoft\windows nt\currentversion\winlogon.
Look at what the userinit value is. On my customer's machine it was %system32%\userinit.exe which is invalid.
NOTE: If you can, post what your value is when you look at this.
Next change the value to read C:\windows\system32\userinit.exe
Now close the registry editor, and we need to go back to recovery console to put your original registry back which should look like this:
C:\windows>cd system32\config
C:\windows\system32\config>del software
C:\windows\system32\config>ren software.old software
C:\windows\system32\config>exit
This (in theory) should get you back into Windows.
Still trying to fix log on/log off issue
Help. I have been trying to fix the log on/log off problem for several days. I am working on a romote computer with XP Home edition.
Using Yadama's instructions I followed the procedures in Method 2. I was able to do everything successfully, but when I tried to log on the problem was still there. I repeated the procedure several times. Each time the register entry has remained the corrected form:
c:\windows\system32\userinit.exe,
Then method 4 was posted and I followed it. I created a NTFS4Dos cd. Booting it in my computer I get to
A:\>
Here I type in:
cd c:\Windows\system32\config
and I get the message:
CHDIR failed for 'c:\Windows\system32\config'
if i simply type:
cd c:
then the following appears
C:\
A:\
Any suggestions?