I have the exact same problem, I think. After install and reboot, the UI will freeze up, and I can not interact with it in any way except from the task manager. Installed the update as well.
My XP SP2 install is 5 days old, and on startup I am running ITE Smartguardian, DU Meter, Cubase SX license center app, Daemontools.

x2 3800
Radeon 3870 latest drivers.