This may not be a registry issue. Or, it may be a normal Windows setting that has gone awry (due to a file corruption) - or it may be a corruption with Windows itself - or it may be that the system is set to display this way.
The little squares are "placeholders" for characters that Windows doesn't recognize.
The cause can be almost anything - and because of this, isolating it may be difficult.
All that being said, here's a few questions that may help to narrow it down:
1) Is this a progressive error (is it getting worse with time)?
2) How many anti-malware scans have you done - and what programs/online services have you used?
3) Have you checked in the Event Viewer for errors that may be related to this issue?
4) Have you checked your keyboard and language options to make sure that nothing has changed there?
5) Have you had virus infections in the past that were removed?
6) Notice that the System Idle Process shows "System" as the owner - does any other process display correctly? (for example, csrss.exe and System both have "System" as the owner on my copy of XP)
7) Have you tried (temporarily) using a copy of taskmgr.exe from another computer? (to rule out a corruption in the taskmgr.exe file)
8) Does this issue change if you use another account? How about if you create a new account and try it?
9) Could you provide a complete list of the programs that are running in the processes tab? That may shed some light on the problem.
10) Since this doesn't happen in Safe Mode, but does in Normal Mode, then it's most likely that it's something loading with normal mode that's causing this.
As a definitive diagnostic, I'd enable boot logging and then boot once into Safe Mode and once into Normal Mode. Then copy the bootlog file to your desktop (that'll prevent further reboots from adding to this diagnostic file on your desktop).
Once that's done, you can copy/paste the info from the Safe Mode boot into a spreadsheet program - and then copy/paste the normal boot stuff next to it (beware, it's a long list!). Once that's done, you can start comparing them and will end up with a list of what's loading in normal mode that doesn't load in Safe Mode.
A bit of research will tell you about these things that are loading - and you can repair/replace them one-by-one to see if that fixes the error.
I know that this is a lot of information and that it presumes a lot of things. So if you've got any questions, feel free to post back with them.
Items is order:
1: Yes progressive with each program that starts. Affects all program user names. See previous attachment.
2: Windows Live OneCare, Ewido & AVG Anti-Spyware 7.5 (the 2nd and 3rd recommended by MS Support out of India)
3: Next on the list. Are you asking for it to be posted here? It was looking for an recent PC that I was trying to VPN to, didn't work. But problem was occurring before that was created.
4: Yes. Wireless Keyboard and Mouse by Logitech. Downloaded newest version and checked "USA-English" listing.
5: No Virus detection in years. Always protected behind router and with McAfee, Norton or current Window Live OneCare.
6: What you see in the attachment is it. As programs start it is progressively worst with more corrup characters.
7: Tried the fix suggest by CTH_Tom with no change in results.
8: Created new account with same results. When starting in Safe Mode with Networking the USER NAME are all blank.
9: See the previous attachment
10: Yes this is true.
Let me know how to create a "boot log" with Windows XP. I can show you the "ntbtlog.txt", but it is identical between Safe Mode and Normal Log In.
I have scanned the computer with several virus checkers, completed scandisk and defrag. This confuser is clean!
Hope that answered all you questions.
The MS level 2 Indian fellow wanted me to return to XP SP1 with the original XP SP1 disk. I told him to take a hike and his boss called me. Next MS attempt will be in 22-24 hours, I will receive a call from a Research Engineer with Microsoft. This out to be a fun, since so far I have been more intelligent than each person who has called.............let's count them.........6 calls and approximately 14 hours of conversation. One call was 3 .25 hours long.