can you get in using safe mode by pressing F8 as teh computer boots into windows? (Sometimes this is tricky, just press F8 repeatedly as the computer starts and ignore the beeping until you get a menu or the graphical windows startup screen)

Daemon tools has been know to do this on some systems and installations, I would recommend uninstalling it and if you try to re-install it again, be sure and select a custom install and not install all the tool bars they offer other than something related to the tool itself. You can generally do this via choosing a custom install.

After that, since daemon tools is teh most likely culprit, try running a virus and malware check. If you find nothing there you can remove any non-essential hardware, (printers, scanners, cameras, cd rom/dvd drives, etc.), then try to boot. If that does not work try doing a windows xp repair from the cd.