Windows reset to factory settings without warning

I am using HP Pavilion 5380 which is working fine for some years. It is running on Windows XP with all the latest updates installed. We have the computer password protected to keep the kids off from it. In the last month when it was powered on it seemed to revert to factory settings for no reason. After logging in desktop went from custom photo and we put on to stock blue HP desktop. The desktop icons are gone and replaced by icons from C:\Documents and Settings\All Users. Some documents on the desktop such as .doc, .xls, etc; are gone. All applications are there but itunes music is gone? What should I do now?

Did you try to do a Windows XP system restore? Or you can still look at the restore points if there are any. I dont know about HP but the restore partition is on the hard drive. There are some times 2 types of system restore like destructive & non-destructive.

I have a similar problem on my other computer. Everything was fine when it was shut down last night. Turned it back on today and was acting like Windows was running for the first time. Files in "Justin" folder like in previous posts.

Make/Model of computer not applicable. I built this computer a few years ago. We are running XP-Pro with all updates and not a single problem till today.

Only difference in my situation? I have tried restoring cause I really didn't care if we lost anything... Could not restore.. said restore point was incomplete due to an improper shutdown. I have NEVER improperly shut down windows. However, in the event of a power failure.. things happen. So, I tried another restore point.. Same thing..

This leads me to believe there is some virus or malware affecting this. Realized through checking settings and such, that some of my windows (especially the 'right-click' menus) come up with a Huuuge window that i have to scroll to the right like a milliion times to get to the 'X'. Window will not show any text or info.. like some kind of video card glitch. IDK..

I have to be honest with you. I have NO idea where to start!

A quick reply would be awesome. Thanks for the help in advance.