I have been working through some trojan/malware issues with my computer. In order to delete a few suspicious .exe files, I rebooted in Safe Mode through msconfig. This was a very bad idea. I can not log in under my ordinary username and password or as the administrator. The system is not accepting my passwords for either. I've read newer malwares can be behind this problem. Using Windows Recovery Console, I tried renaming the boot.ini, see below

ren C:\Boot.ini Boot.ini.bak

After rebooting, I got a message stating <windows root>system32\hal.dll is missing. At this point, I'm not sure what to do. Any suggestions?

Edit: Moved topic from XP to the more appropriate forum. ~ Animal

Using MSConfig to access (force) safe mode when there is malware on your system could have disastrous results and render your computer unbootable. Some types of malware can delete or alter the safeboot key in the registry resulting in the inability to reboot fully into safe mode or back to normal mode. The Safeboot option modifies the Boot.ini file and you may be locked in a continuous reboot loop afterwards where you cannot get back to MSConfig and undo your selection.

Using the Recovery Console as you did is the logical step. For the error you are getting now, see these links:

Langa Letter: XP's Little-Known 'Rebuild' Command - easy fix for "Missing HAL.DLL," "Invalid Boot.Ini," and several other fatal startup errors.
How Do I Repair A Missing Or Corrupt HAL.DLL

Just doing a lot of reading on this site today. Thanks quietman7 for the two sites you gave. Wish I would of had them a couple of months ago when I went through the same problem. I would suggest that those pages of the repair method be printed and saved by all.
Thanks again quietman7!!

You're welcome.