This too happened to me and after many hours of Googling came up with this solution, by the way this only seems to affect people with newer processors ie AMD 64 and Intel Prescott something to do with the motherboard bios not updating the processor microcode correctly anyway back to the plot.
For those of you who have already installed SP2 and getting the endless welcome screen this trick seems to work,reset your computer and enter the bios setup (most systems its pressing the Delete key others you may find in your system documentation)next disable the processor level 1 and level 2 cache.
Save settings and reboot.This slows the system down terriby but it is the only way. Next uninstall SP2 but be prepared for a lengthy wait.Once you are back to pre-SP2 state follow this procedure(and for those about install SP2 and think they may be affected follow from here.
Navigate to the system32\drivers\ directory in your windows folder next copy the file update.sys to a location where it won't be overwritten and where
you can easily find it, next (re)install SP2 you may have to go back to the Windows Update site to start the setup
procedure don't worry if you have already downloaded it it will only run the setup procedure.Once SP2 has installed it will prompt you to reboot.
DO NOT REBOOT at this stage, click cancel and then copy the update.sys file back to your windows\system32\drivers\ directory overwriting the file already there once this is done then reboot and all should be well. If you are wary of overwriting files just rename the update.sys file before copying the original back