Strange Explorer.exe Behavior...

Hello, recently I have been having a strange problem with explorer.exe... When explorer.exe is running, I cannot run msconfig, mspaint, defrag, or GenuineCheck.exe from Microsoft.com for downloads, and who knows what else (windows update seems to be freezing too). I formatted the drive for this reason along with others, but I cannot figure out why this is happening. If I run one of these programs that don't work, they do appear in the Processes tab, but no window ever appears, and if I don't 'end task' them, I receive a Memory Instruction error at logoff/shutdown. Once I end explorer.exe through Task Manager, I can run all of those programs from Task Manager perfectly.

At first I thought it may have to do with policies, but could find absolutely nothing in the registry (winxp home) supporting that. I'm pretty certain it isn't a virus but you can never be too sure, although looking through my HJT logs, running processes, and running AV scans, I could find nothing suspicious. Renaming these files did nothing also. Running these programs in safe mode however was successful. I found Windows Firewall was supposedly blocking MMC.exe since it popped up, and I turned it off but with no success. Now I might be leaning toward software I installed may be causing this, but I don't see any reason how because I wasn't having this problem before.

I'm really stumped because I have no idea what is causing this... I've been trying to fix this for quite some time now and I would REALLY appreciate any help.

I'm running Windows XP Home SP2 on an administrator account.
Thanks for taking the time to read.

Yes I formated as in erasing everything. I tested them when I first installed (defraged mostly), which is why I'm thinking something I've installed may be causing it, but it seems odd because these problems worked before.

Thanks, although I'd rather see if I can find a solution for this because I really don't want to format again since I've pretty much completed restored what I wanted. Any other suggestions?

I believe I found the problem. I just decided to go along with what you suggested and reformat and go step by step. Appears to be IconPackager by Stardock is interfering somehow... Thanks for your advice and time!