One quick, and seemingly simple question... does it stall on start up with a blue background and a "pop-up" type window? Or does it take you to the XP user screen and show a user name with a avatar image?
this sounds slightly reminiscent of a hacked copy of the Operating System... when you F8 and go into safe mode.... just Push OK -or better yet, just hit enter, when it asks for the log-in/password...DO NOT enter anything in either line. If that doesnt work then enter the previous users name (the one it shows to log in when starting normally) and leve the password field blank. It should let it start in safe mode. THEN go to your control Panel and USER ACCOUNTS... find the one it is asking for the password on and click on it.. one of the options will be to remove the password. (as previously mentioned.) Restart.