Can I ask, when did you install the XP SP3 update?

Also, do this, go to Start, Control Panel, Administrative Tools, Event Viewer and note any errors around the time you did the last safe boot.
Also, another thing to try is go into msconfig see what it auto starting and remove all the check marks. Then shut down and try again to boot to safe mode and see if it proceeds, if it does then it is hanging on one of the items in auto start.