I have had to roll back to previous version of Win XP to solve this problem. On startup all I get is wall paper and the mouse icon nothing else. Its almost as if I have an extended part of an extended desktop without the working bit! ???
That sounds like explorer.exe failed to start on boot. Try launching it through task manager:
Open Task Manager (CTRL-ALT-DEL) → Click on New Task (Run) in the File menu → Type in ‘explorer.exe’ (without the quote marks) and click OK.
This should bring back your taskbar/icons etc.
Afterwards, open msconfig and check that explorer.exe is set to run on startup.
Hope this helps 