Try going back to an earlier restore point. The option to restore to an earlier saved stable operating system can work .. you should find it through the control panel.
If not... You can try repair windows.. ie boot via your windows cd and attempt a repair.
I'd say try reinstalling the drivers for the laptop re the internet/ethernet, etc via another pc and reinstall them... but it sounds like it's too far gone for that.
Format and reinstall windows via your windows cd is probably the best idea.
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