Repair a Deleted Default Administrator Account in XP Home?

Archived from groups: microsoft.public.windowsxp.perform_maintain (More info?)

I've just finished a repair of a friend's XP Home system that his children
managed to flood with viruses and spyware. Everything is working fine but
when I try to run Safe Mode and select the default "Administrator" account
the system hangs at "loading your personal settings".

I figured the account had been damaged so I deleted the entire Administrator
folder under "documents and settings". I went back to Safe Mode and saw
that Administrator was still listed as a login option. I tried it and it
hung again. Looking in Documents and Settings I see that Administrator was
re-created. I went back to Safe Mode and tried it again but it still hangs.

Short of re-installing Windows is there a way to repair the default
administrator account, make a new one, or just remove the failing option
from the Safe Mode login menu?

The system is fine otherwise. I have a new "owner" account with
administrator privileges and I can create new accounts.

Thanks,
Ric