I remember the same eventual "system got into broken state" issue on a laptop with XP. After reinstalling everything the third time (including wireless network drivers from a USB drive and at least a billion service packs shudder) I figured out how to take a disk image with a linux live-cd and save a clean iso of a fresh install with updates and my preferred programs pre-installed onto a separate partition where I also carefully mapped all my user data directories. If windows started being screwy I'd pop in the LiveCD, run some commands to format the OS partition and reimage it from the iso on the data partition, and after applying a couple of patches I'd be up and running again. I think I got the whole process down to like 30 minutes at one point.