There was a problem with a Spybot false positive which resulted in the registry value of userinit being deleted. The symptoms were similar to yours-- login was never completed before being returned to the logon screen.
Guidance that may help you to regain control of your computer is detailed in this Spybot blog
After you have control of your computer, you will want to check the registry value of HKEY_LOCAL_MACHINE\Software\Microsoft\Windows NT\CurrentVersion\Winlogon\userinit. Follow these steps: Start>>Run>>regedit>>OK, then navigate by clicking on the + of each item in the registry hives to expand. For Windows XP, the value should be "c:\windows\system32\userinit.exe,". (Make sure to include the trailing comma.)
If the userinit value is missing or points elsewhere, then it is possible that a virus has changed the value. Make sure to fully check for malware. This is easily most easily done by submitting a HJT (HijackThis) log to the appropriate forum. There will be instructions within that forum on how to create and submit the HJT log.
Alternatively, hP support may be able to guide you through a "backdoor" restore which would take care of your problem. You might want to check with hP before you try the solutions outlined in the Spybot blog/forums.
Edited by ragergle, 09 February 2009 - 10:28 AM.