Never, never, never ever use hibernate.
Never.
There is an extremely great probability that your use of hibernate is the actual 'cause' of your problem.
I assume that numerous people will come in here to say that hibernate is safe and wonderful.
They do not know what they are talking about.
It is a disaster. It is a very common cause of exactly what you are now enjoying.

The various applicatons you named as far as updates are concerned- Do you have them configured for auto-update or do you do them manually?

uh, you're supposed to do a restore point BEFORE allowing any MS updates!

XP home is running with SP2 disabled by your so-called security software?
That's a new one!
It is also completely crazy and very very wrong.

Nothing- "Nothing" in your 'startup' eh ?
How much are you willing to bet that there are MANY things in your startup?
Whatever is displayed to you in your desktop view of Program Files has nothing to do with your real startup configurations. Nothing.

You haven't actually responded to many of the comments and questions here-
Have you tried Safe Mode?
Why don't you remove your hard disc and simply copy all of the important personal data on to another hard disc? This is no big deal to do.
Then, just start over. Again, no big deal and your computer will seem like new- for at least a week!

Why would you accept the absurdity of your security program disabling XP Service Pack 2? That is completely crazy.
It is also completely impossible to believe! XP SP2 is enormous and if you had it installed and only a very small number of SP2 'features' were disabled you would have a very very dead Windows XP Home.

Please try to give us the info on what you have so far tried to do to get your system running again.
I do not mean to give loads of details about what happened before the crash.

btw, I could add b61 to my ID, so I outrank you!!!!!!!!!!

Now, as they say to the Prisoner "We want information."

p.s. Get rid of that security program. It is ridiculous.

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It just clicked in my aging brain-
Embarq-
It's an enormous con- F-Secure and such- They make the Enron people look almost sweet and cuddly.
F-Secure- A huge marketing con to push ISPs to 'bundle' useless security toys to innocent and usually very new adsl users.
And, normally at a ridiculous cost. ISPs love it because they get money for nothing. Users only get a false sense of security and a shafting all the way up to the hilt.

Your problem is very possibly caused by one or many more viruses that XP finally couldn't take any more.
A simplistic statement but more than probably true.