This was an issue with XP a few weeks ago and it was attributed to malware being installed people's machines.
Reboot into safe mode and try to revert back to a previous install. I would also do a virus scan as well.
Just press and hold F8 while Windows is booting to get the boot options menu and select Safe Mode.
In the 6 cases that I saw, ALL 6 of the computers had been reformatted FROM SCRATCH. Explorer 8 definitely caused the problem. I know there's a glitch in it because not a single one got that screen (and they all did it at different times) until very shortly after Explorer 8 was installed. In fact, after the first 3 went, I had that feeling, and that was why we experimented with the next three. Sure enough!