|If you re-install, as soon as Windows itself is up and settled, reboot to see if you are out of trouble. Assuming you are, maybe this is the best following sequence:|
1. Turn off automatic Windows updates.
2. Set up your Internet connection.
3. Install your Anti-Virus.
4. Get SP3.
5. Get IE 8.
6. Get IE Cumulative Updates.
7. Turn on automatic Windows updates and get the rest.
This will ensure you don't have updates to updates and it also gives you the chance to reboot after each of the above have settled to ensure you are still OK. Of-course, I'm assuming you want SP3 and IE8.
Please come back and let us know how you got on.