Most certainly a drivers issue.
The fact that the reg backups have gone too is a bit worrying as the machine was online at the time.
You need to start in safe mode and remove the video (graphics drivers) at least.
The missing cursor is a bit of a problem but have you checked the obvious - cables/plugs etc.
I take it the keyboard is working ok?
Have you checked the PC properties by right clicking on My Computer. This will tell you if some programs are running without enhanced mem. (Dos Mode)
The 'final solution' is to re-install over your existing setup to fix all of the driver problems.
If the same problems are just imported into the new installation then you should begin to back up important data ready for a full re-format.
Remember to pick out any important emails too by saving as eml. (Everybody forgets this one)
Perhaps more info would suggest a less drastic solution.