Windows 7 Home Premium Issue

A few days ago I rebooted my system and the following started happening.  I get an immediate error message once I log in that reads as the following:

"Failed to connect to a windows service"
"Windows could not connect to the Group Policy Client......"

I receive this message even if I start up in Safe Mode.   I have executed the following commands from the command line in Safe Mode:

"netsh" --> "winsock reset"

This is supposed to resolve this issue, but after rebooting the message continues.  What is even worse is that I cannot open any applications MS Office, all other application show the below message when double-clicked.  For example if I try to open the Windows Explorer, the following message is shown:

"explorer.exe" --> "The server process could not be started because the configured identity is incorrect.  Check the username and password."

I have tried to use my recovery disk, but it only offers to wipe the machine, and restore it to factory settings, which will wipe out my data of course.  I have most of my data backed up, but some I do not, so wiping it would have to be the absolute last resort.  So I am asking for assistance from the experts, and hope that one of you will have an option to get my system back, as it appears that something my be wrong in the registry, but I do not want to change anything unless I am sure of the results.  

Do any of you know what is causing this, and how to resolve it, without wiping out my data and reformatting the drive?

Thanks in advance,

aj85