Windows XP Login/Logoff loop

It definitely sounds virus related. We had a similar problem here at work but the removal process really depends on what virus you have. The following instructions should be exercised with caution as you can potentially create additional problems, but please ask any questions you have rather than screwing something else up.

I recommend downloading the following tools on another computer, copying them to a flash drive, and then booting into SafeMode on your computer to use the tools.
Process Explorer - http://technet.microsoft.com/en-us/sysinternals/bb896653.aspx
AutoRuns -  http://technet.microsoft.com/en-us/sysinternals/bb963902.aspx
Move on Boot - http://www.softpedia.com/get/System/Boot-Manager-Disk/MoveOnBoot.shtml

When starting your computer press F8 to load the Windows XP boot menu and select SafeMode from the list of options. Once SafeMode loads, hopefully the virus won't prevent you from doing so, run the program Process Explorer.

Process Explorer will show you everything that is currently running on your computer. Look under the explorer.exe thread for any programs you don't recognize. That's not to say you'll recognize everything, but look for stuff that is really suspicious. To the right of each running process are the Description and Company Name columns. A dead giveaway for viruses are blanks in these two columns, but again, that doesn't mean it's always applicable. (I have 1 or two processes for my mobo that don't have entries in either column.) You're specifically looking for files that aren't from Microsoft as your primary culprits, but hopefully you'll recognize files by companies that are required to be loaded for software you've installed.

When you locate something you're fairly positive is a virus file, and there may be more than one file, select the file and press Delete. You'll get a prompt asking you if you're sure you want to kill the process so select Yes. Pay attention to what happens next. In many cases a file that contains a virus will generally quit and that's the end of it being active in this session. However, a few files will then reemerge as either the same process or as a different name. So if you see anything suddenly appear in Process Explorer as soon as you kill a process, it's most likely associated with the virus. Keep in mind that anything running under the System Idle Process or the wininit.exe thread can potentially cause your computer to freeze up as these are the files that are actually controlling your active session. It won't hurt anything to kill the process, but you will have to reboot and start again.

After you've eliminated as many files as you feel are viruses run the program AutoRuns. AutoRuns does the same thing as msconfig does, but it shows you everything that loads when Windows boots, which in the case of many viruses, aren't shown in msconfig. When the program loads and is done scaning your computer, select "Options," from the menu, and check "Hide Signed Microsoft Entries," then close the program and run it again. (Checking this option will remove any signed entries which will eliminate a ton of entries from each of the different tabs and will make sorting through all the results much easier.)

On the Logon tab look for more programs that you don't recognize and uncheck them. This will keep the program from loading when the computer boots and if you accidentally uncheck a legitimate file that is required for a program you've installed you can run AutoRuns again and recheck the box. You'll want to do this on the Explorer, Internet Explorer, Services, and Winlogon tabs.

Now go to add/remove programs and uninstall any software that you know you