I have been working on this problem for over a day now, and I have gone as far as I can. As stated, my accounts log off right after log on, but safe mode works. Many sites say my userinit.exe registry is wrong, but i have checked it and it is fine. I have also followed the instructions here to repair the registry anyway (http://support.microsoft.com/kb/307545/
), but that allows me to logon to the administrator once the first time. As soon as I restart, the problem occurs again. I can also access the recovery console fine. This is XP Professional.
Either I reinstall windows and spend days reinstalling software, work in safe mode forever, or get some help :)