OK, we are going to replace the copy of LSASS.EXE and WINLOGON.EXE in the System32 folder with the copies in the I386 folder on your XP CD.

Boot to the recovery console. At the Command Prompt:

Type the following commands at the command prompt, pressing enter after each command:
expand D:\i386\lsass.ex_ C:\windows\system32\
expand D:\i386\winlogon.ex_ C:\windows\system32\
exit

Replace D with the drive letter for your CD Drive.

Reboot to Normal Mode.

What happened?