ok. Told files in use, chose Y rebooted, no icons still.

Did Check Disk run when you rebooted? This would have been apparent and taken several minutes.

yes checkdisk ran

At the moment I can think of nothing else besides getting an XP CD.

Again this should be an integral part of any computer purchase. Perhaps you can contact the seller.

My only other thought at the moment seeing as you can access the Task Manager is to experiment there.

Can you open the Event Viewer:

File > New Task (Run...) eventvwr

yes, its open

Here is my general explanation of the Event Viewer (plus Microsoft's):

Look in your Event viewer: rt. click My Computer then click Manage then Event Viewer.
Or: Administrative Tools/Event Viewer or Start/Run/ eventvwr
Open the system as well as the application tabs & look for red X errors. Click error line for details.
Post back the source & event id & Description especially of errors that seem to coincide with this issue.
Also check the Information lines that might coincide with this issue.

How to view and manage event logs in Event Viewer in Windows XP

on the date of the initial restore there are this error :
source : Application Hang
Event : 1002

If you right click on an error line and choose Properties you will find details.

Is the application listed? Also the module?

I would focus on System errors that coincide with a boot.

I would imagine many errors repeating at every boot.

Tracing this stuff, if traceable from this point, will be very tedious.

I am grasping for last ideas.

From the Task Manager try File New Task Run

nusrmgr.cpl

See if you can create a new Administrator Account.

i could create a new admin account but still no icons

The following boot-start or system-start driver(s) failed to load:
Avg7Core
Avg7RsW

Does this mean anything?