Ping any MVP - XP Home Problem

I have a weird situation with XP Home edition; SP2 is NOT installed:

System:
XP Home on an eMachines T2742 (2.7 GHZ; 256 Mb RAM; 40 Gb HDD)

Problem:
Boots to Welcome screen and loops back to welcome screen when any of the
UserID buttons are clicked. Ctl-Alt-Del brings up the Classic login dialog
box, but still loops back to XP Style Welcome screen when attempting to log
in from the Classic dialog. Cannot circumvent the boot sequence, nor get
past the Welcome screen to get to any desktop functions in XP.

What I Tried:
F8 out of startup sequence to safe mode - same thing
F8 out of startup sequence to command prompt mode - same thing
F8 out of startup sequence to last known good config - same thing
F8 out of startup sequence to debug mode - same thing
F8 out of startup sequence to boot logging mode - same thing
Checked the CMOS settings for odd power or video settings - all default
settings appear correct.

Can anyone help with a solution please?

JL
.

Loading