I'm running Win XP SP2 and last night started experiencing some serious issues. My pc has been working fine for months - until now.
At midnight my AVG (free version) started running its daily scan and I went to sleep. In the morning, I went to my pc to power it down and noticed an error which I should have written down exactly but it resembles this: "Cannot create file D:\$n"
Explorer was visible and everything _looked_ fine, but I was unable to activate "My Computer" and I also could not reboot from Explorer... both functions simply timed out.
I forced a power off by holding down the power button. When I tried to reboot, I got past the BIOS but after that windows never loaded. I observed that all the hard drive lights were on, and the green monitor light was on, but nothing more. I did not hear any unusual sounds from the hard drives.
If anyone has any ideas how to troubleshoot this I'd much appreciate it!

I'm at work right now, don't have full specs with me, but this is a Dell Dimension 4600 with 1.75gb ram, 80gig and 160 gig HD, Win XP SP2, 500W Antec PSU (brand new), stock motherboard, 9600xt-based vid card.

I would try looking in your BIOS to see which drive is listed first in the boot order, and make sure the correct one is listed first.

Sounds like something has corrupted your windows install. Boot up from your XP disc and perform a repair install. This will more than likely fix your issue assuming it's not hardware-related.

1. Boot the computer using the XP CD. You may need to change the boot order in the system BIOS so the CD boots before the hard drive.
2. When you see the "Welcome To Setup" screen, you will see the options below

This portion of the Setup program prepares Microsoft
Windows XP to run on your computer:

To setup Windows XP now, press ENTER.

To repair a Windows XP installation using Recovery Console, press R.

To quit Setup without installing Windows XP, press F3.

1. Pressenter to start the Windows Setup. Don?t choose "To repair a Windows XP installation using the Recovery Console, press ?R", (you don?t want to load Recovery Console).
2. Accept the License Agreement and Windows will search for existing Windows installations.
3. Select the XP installation you want to repair from the list and press Rto start the repair. If repair is not one of the options, END setup.
4. Assuming repair is an option, go ahead a select that. Setup will copy the necessary files to the hard drive and reboot. Do not press any key to boot from CD when the message appears this time. Setup will continue as if it was doing a clean install, but your applications and settings will remain intact.

What Sn0wMan said, that sounds like a hard drive write error, which could very well have b0rked something essential for boot.

But yeah, by doing a Repair Install exactly as above should sort it out. Just to reiterate, don't access the Recovery Console.

Just go through the installer until it detects your present Windows install and then press R to repair that install.

Good luck

Actually if the repair doesn't work you'll want to access the Recovery Consule.
When the Recovery Consule gets to a DOS prompt you'll need to select the the OS to be recovered, usually 1 and hit enter. It will then want the Administrator Password. Type it in and hit enter. You should be at C:\Windows
Now type chkdsk c: /r and hit enter. This process can take quite some time to complete and it may or may not fix it. But I've had success in recovering corrupted system files in the past.
Good Luck