I carried out an install of SP3 on a Windows XP machine. It seemed to run fine, and rebooted happily several times after the install.
However, after a shutdown it stuck on "Windows is starting up" and would only launch after an F8 and applying "Last known good configuration".
I have created a password for the user account, and this solved it for one reboot and then it re-occured. Disabling all startup items seems to make no difference.
Strangely, I changed the username of the account and Windows allowed logins from both the old and the new username.
As it stands, the system works perfectly in LKG mode, but no idea what's causing the problem. Nothing shows in the error log.
Any ideas gratefully received and will be tested promptly.