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See potdog's comments below... try another keyboard could be the keyboad itself is faulty.
Well spotted potdog!!! I should have seen that!!
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First of all this is a VXD error which is a virtual device driver, most
likely the mouse driver.
1. boot into safe mode
1.1 How to
1.1.1 Turn your computer on
1.1.2 When you see "Starting Windows" press the <F8> key
1.1.3 This will take you to a menu
1.1.4 Select "Safe Mode" and press <enter>
The computer will take longer to start windows be patient.
1.1.5 If all goes well you will be presented with an alert box "windows
is running in safe mode click on OK, you should now be at the
desktop with the words 'Safe mode' in all four corners/
2. Find and rename the file msmouse.vxd
2.1 How to.
2.1.1 Click on the start button
2.1.2 Look for Find/Search
2.1.3 In the box 'Named' type 'msmouse.vxd' (no the quotes)
2.1.4 Click on 'Find'
2.2 Rename msmouse,vxd
2.2.1 Left click on the filename shown in the search window.
2.2.2 Press the <F2> key (This hi-lights the filename so you can
change it.
2.2.3 Type 'msmouse.old' (again no quotes) and press
<Enter> key.
3. Shutdown and turn OFF the computer.
4. LEAVE IT OFF for at LEAST 15 seconds.
5. Turn it back on.
At this point it can go a number of different ways.... Stops at a DOS screen, locks up, stuck in a reboot loop, boot to desktop no mouse movement OR it could just notice the file is missing and ask for your Windows CD and install it.
Or just maybe it will find a whole new direction to go in.... hey this is Windows!!! I mean lets face it if your car crashed three times in one day would you just restart and carry on going NO WAY!!! but Windows hey what do you expect.
I have written my reply in this way as I am unsure how well you know Windows,
feel free to PM me if you need any further help with this, alternatively the forum does have a tech chat room just let me know when!