Thanks one and all for the replies. I ran the scannow utility with my xp disk, restarted and still cannot enter safe mode.

Bluefish, Yes, I am able to boot in Normal mode no problem.

Santiyo, This computer is one I put together from a barebone kit that Tigerdirect sold me. Windows xp from Walmart.

not sure if this would help, but try entering safemode via step-by-step method.

zugolg. OK, what does that mean?

Hi tadpole!
There are a few options on Safe Mode, when you tap F8 at start-up you get that menu. Zugolg suggests you to select the step-by-step method there, in which you can see what's being load by Windows, and you're able to say Yes or No to a few Windows Services etc.
Blue

Thanks for the help all.

These are the menu choices I get when I tap f8.

Safe Mode
Safe Mode w/ Networking
Safe Mode w/ Command Prompt

Enable boot Logging
Enable VGA Mode
Last known good configuration
Directory Services Restore Mode
Debugging Mode
Disable automatic restart on system failure

Start Windows Normally
Reboot
Return to OS choices Menu

Which one is the step by step?

I dont think step by step is availeble in XP , only in 95 98 and ME afaik.