Error comes up sometimes d ue to corrupt registry files (in this case system)
boot from a windows cd or other bootable cd
go into <c:\system volume information> , then _restore [?????????????] folder, then and in any of the Rp?? folders , then snapshot folder, then rename the _Registry_Machine_SYSTEM file to only SYSTEM and copy it back to c:\windows\system32\config and replace file if it asks. do the same with the sam, securtiy, software, and _registry_user_default files. what you basicly just did was a "dirty" system restore of your registry files
hope it helps