Since installing service pack 1 for my XP home I have a strange problem. When the first user logs on after a boot Xp behaves Ok. But if you subsequently switch users or leave the pc for a while so you need to reenter the password then XP takes the password and displays the Welcome screen with the 'loading personal settings' message displays and goes no further. Hitting ctrl alt del at this point displays the users wallpaper with no icons or taskbar and no applications appear to be running.
It may be that the personal settings include a program that is not available, has been removed or is damaged. Causing the machine to stop at that point. I'm not sure what you should do to rectify this, but there will be others, who have first hand experience, who can advise you.
I had a similar problem with two machines on my office network after adding additional users. The first user or administrator had no problems, but subsequent users were taking eleven minutes (I timed it) to get into the system. They hung just like yours on loading personal settings, but eventually got there.
I managed to cure it by entering the appropriate DNS and WINS settings in TCP/IP properties. Letting the new user login once and then removing these settings (which shouldn't be needed)
I have absolutely no idea how or why this worked. It was a shot in the dark and I'm just glad that it did.
Your solution may be somewhere else, but this may help.