Windows Explorer keeps encountering problems

This is what happens upon logging into my Admin profile within WinXP.

1. After a delayed load time, the desktop appears. Desktop icons and the taskbar are there. BUT

2. Whenever I attempt to execute a program (open a folder, or click on a picture file) a "Windows Explorer has encountered a problem and needs to close. We are sorry for the inconvenience" box appears, followed closely by an explorer.exe application error. Sometimes these are randomised, but it always causes a desktop refresh - explorer.exe closes then reloads itself

3. Accompanying these explorer.exe errors are Service Host errors

4. I have attempted a repair installation. Didn't work.

5. I have attempted SFC /SCANNOW. It went through it without a hitch, not reporting anything out of the ordinary. It didn't fix anything

6. Not even my wallpaper is appearing. What appears is "Active Desktop Recovery", notifying me that Active Desktop has been turned off.

7. I can access files when I'm in safe mode. There is no crashing or inability to open folders.

I have read numerous threads but none seem to address this issue. Please Help.