Explorer.exe crash - Start->Run not working

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Hello!
Earlier this day when i turned on my computer, it started up normally,but the cursor had the the "busy" sign which did not disappear. So I restarted the computer and touched nothing. Still even after about 10 minutes it didn't disappear(CPU usage was <5%). Since it wasn't like that a few days ago I just ran System Restore. And got a blue screen. Now when I try to boot up explorer crashes emediately.

Desktop shows nothing but wallpaper but task bar is there(Until I "don't send the error report"). I can click some shortcuts in the Start menu and some things will open(Like IE im using right now) but not until explorer will be shut. Using any explorer using commands like "Open" or "Save as" in any aplication will emediately terminate it. I can load a task manager with Ctrl+Alt+Del and it also works fine but it crashes when I try to create a new task. When I click it a small empty window will appear in front of task manager which can't be shut and task manager becomed inaccessible. Ctrl+Alt+Del gives no response after that. Same thing with Run from Start menu. The Command Prompt actually works. I can execute some aplications with it(most crash though). Typing "explorer" brigs back the task bar along with the "send error report" window.

I suspected a virus or trojan, so I ran AVG and Adware and they found around 100 proplems and "solved" them, But that didn't change anything. Going into safe mode or trying to load last successfull configurations changes nothing either. Still same crush of explorer. I'm using a 32bit version of Windows XP Professional.

Any help is appreciated. Thank you.
 
As you had a 100 or so issues (and highly likely more) It's very likely that some Windows files just don't exist any longer.

If you are able to backup in safe mode (F8 repeatedly to get to safe mode on startup) This would be ideal.
And then fully re-install Windows plus drivers and lastly updated AVG again
Then return your backup

Otherwise you could run a Repair of Windows,
 
In your position I would first do the most thorough hardware testing (in safe mode) as I could manage - especially Ram and Hard disk. If failing to find any problems (and even ONE fault is enough), I would then do system restore to the earliest point I still had and try again. If that failed I would do a complete drive wipe and reinstall (having saved my data first, of course).
 
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