OOPS - I modified and lost the OP, rather than adding this post ! (Anyway the problem was a lockup where the start button and opening programs lock up, even on a very light startup soon after an XP reinstall, and the "solution" was to crash explorer.exe with the Task Manager. Likely this is IE8, very possibly clashing with Avira.)
After some stuff, the problem morphed to :
"When you start Internet Explorer 8, it opens and then closes immediately"http://support.microsoft.com/kb/967896
And I am very reluctant to uninstall 8, concerned that it may not play nice with SP3. (The famous Gates integration of browser and OS). I did try a reinstall over, did nothing.
Well this is a defacto solution for getting rid of IE, so I will wait a while and see if there really is a need for IE, using the Firefox and Opera "we are IE" elements if necessary (hmm.. Windows Update comes to mind).
If necessary, plan B is to either wait for IE9 or to uninstall .. in which case I would probably simply go back to 6, or possibly 7, rather than continually have these IE8 problems.