1st of all missed the bit in your 1st post about it booting ok in safe mode. Sorry. Anyway, 'cos it starts ok in safe mode it suggests your basic os is ok. Not sure about your cd drive. I'm now running W2K, and when I start in safe mode I can see all my drives. You could try starting in safe mode then using msconfig > startup see if there's anything unusual trying to start. If everything looks OK try disabling items 1 at a time then rebooting in normal mode. Have a look at this thread for some possible help click here
I have seen something similar before. On a friends PC, when it was first booted you would get a string of "07" that never ended unless you did a ctrl+alt+del then all was OK. In my humble opinion, it is either a virus, or a corrupted BIOS. You could try to get updated Norton boot disks (sure you can download floppy versions) or try updating the BIOS (be careful if doing this though).
Accord you say its 'some sort of boxing game' is this a game that has been installed by your friends children? If so have you tried uninstalling it and rebooting the PC? (remember you will loose the game unless you have the disk for it).
if i reinstall windows over the top of the old one, will it remove their own profiles from it? would appreciate your comments.
another things, there is loads of old games, progs, utilities on the system which im sure is not used anymore, so if i cant get it going by the end of the day, i shall recommend a format and clean install.