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I am writing on behalf of a friend whose laptop has been acting weird and now it won't boot completely into windows. He is not sure if he has a virus or what caused the error.
The laptop tries to load into windows where you see that moving/loading bar but then it goes to a blue screen and says set-up is being restarted and that is what it does. He has tried using the repair function with the XP repair disk but all the laptop does is reboot and continues to reboot after it goes through the repair function.
Can someone please help. Thanks.

Try using the recovery console, which you can access from the XP CD. Then try running fixboot and fixmbr.

Is the recovery console the same as the repair option in the xp cd? How do you run fixboot and fixmbr?
Thanks.

They're not the same.
From http://support.microsoft.com/kb/307654
1. Insert the Windows XP startup disk into the floppy disk drive, or insert the Windows XP CD-ROM into the CD-ROM drive, and then restart the computer.
Click to select any options that are required to start the computer from the CD-ROM drive if you are prompted.
2. When the "Welcome to Setup" screen appears, press R to start the Recovery Console.

OK we ran the fixboot last night and that did not work.
We will try the fixmbr tonight.
He also mentioned to me that sometimes there are a lot of colors showing on his screen. He slo stated that he has even seen a "smiley face" during one of the laptops rebooting times.

A very useful tool is the Ultimate Boot CD for Windows. You can run various tests by booting up the CD, such as scanning for spyware and viruses.

Created a boot disk using the "Ultimate Boot CD for Windows" and did a spyware and virus scan. The scans found errors which I fixed, however when I took the boot disk out and resarted the computer, it still would not boot into windows. It keeps going as if it is going to boot into windows then a blue screen appears which says "setup being restarted" and it then restarts into a continuous loop with the same "setup being restarted" error. Also noticed that the monitor/screen sometimes reboots with lines & weird sysmbols on the screen.
I tried deleting and adding back the boot.ini file but that did not solve the problem.
What should I do next? At this point I am unsure if a re-install of windows will fix the problem.

You could try running fixboot and fixmbr again.
Can you check the temperatures in the BIOS, particularly the cpu temperature ?
You also might try resetting the BIOS to the default settings.
You could also use the Ultimate Boot CD for Windows to check for possible hardware problems, such as the video and hard drive.

What should be the desired temperature when I look into the BIOS?
Also, what utility in the Ultimate Boot CD for Windows would I use to check the hardware problems, such as the video and hard drive?
THanks.

"What should be the desired temperature when I look into the BIOS?"
It depends on the cpu. Post the temperatures and the cpu here after you check it. Anything above 70 C. is probably not good-others here may want to comment on that.
"Also, what utility in the Ultimate Boot CD for Windows would I use to check the hardware problems, such as the video and hard drive?"
Under tools there is something called system tools, I believe(I'm not looking at ti right now)-there should be a tool for checking the hard drive there. You may want to explore the menus. I'm not sure there is anything to check the vidoe. Again, ecplore the tools.

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