The steps were correct for what I could recall.
To begin with, the cause of the initial problem of getting the login prompt was quite possibly due to the .NET installation.
Why it got stuck on the loading screen, I am not sure on that. Your user profile might somehow became corrupted or at least some of the related system files.

At what point, does it not let you and give you that error when you are trying to undo your previous steps?
I think without doing anything, you should try to reboot but first check on this:
Right click on Start button then click on Explore, and under Documents and Settings, see if there is another profile similar to yours but with additional number after it (something like bunch of zero and one at the end).