First of all - welcome to BC !
I have just been through your posts with Dakeyras and he seems quite happy that you are clear of malware, and I echo his sentiments about p2p software !
I believe you have tried using a Windows Repair disc to resolve this problem, without success, but am I right in thinking that your computer boots normally into Windows, it's just when you try booting in Safemode that it freezes ?
Before you go to the lengths of a complete re-install try running first the chkdsk command. Chkdsk will check for any failings in your hard drive.
To do this, click 'Start' and type 'cmd' into the search box. At the top of the list shown you will see 'Cmd.exe'. Right click on this and the select 'Run as administrator'. Then at the command prompt type 'chkdsk /r' (All of these without the quotes and note the space between 'chkdsk' and '/r')
You will then get a message saying that it cannot do it, do you you want it to run at next boot? Select yes and re-boot the computer. As it starts, it will run chkdsk. As this can take anything up to 1 hour, don't do it when you need your computer in the next five minutes.
When it has finished it will show a report saying if it found any errors and what it did to fix them. Then try safe mode again.
If there is no improvement, run the SFC scannow process. This attempts to repair corrupted Windows files. Start the command prompt exactly as before, only this time type 'sfc /scannow', again noting there is a space between 'sfc' and the '/'. And again leave it to run untiil it is finished. Overnight might be best as it can take quite a while. It too will produce a report saying what it has found and done.
If after that, you still have the problem you are probably looking at a Windows re-install. If you don't have an install disc, or for some reason cannot use the built-in recovery partition, then so long as you have the original Windows install key you can use any appropriate Windows install disc to do the job. When asked for the key, put your own in. You may need to make a phonecall to MS to get the computer activated but you will not have any problem over a repair like this.