Several problems at once here which sounds like a corruption to either system.ini or your registry
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Best bet is probably to do a system restore:
Click on start then programs then accessories then system tools. Find and click on Restore and follow the prompts. (Hopefully you know how to navigate using the keys - TAB, return and SPACE etc.)
Alternatively create a bootlog from the startup options (when it gives you the option of safe mode) and have a look in there. It will tell you all the things it had problems loading (a value of 2 for the error code after the name means "File not found").
BTW Is your mouse USB,serial or PS2? If USB then it might be worth you plugging in a PS2/Serial one to ease use until the problem is sorted.
Oh and:
