>2. Is there any tool that will allow me to take a snapshot of the WHOLE system after I set it up again in order to reset system to a working configuration in case this happens again? I remember a HW solution that did this, but is there anything that's SW based (preferably free)?

Use imaging software such as PQDI (from the same folks that make Partition Magic, IIRC). Get the box setup with the OS and apps you want, then save the image. If the box gets trashed, you're ten minutes away from getting it back to its original state. It sure comes in handy when you find out the latest build of VS.NET renders your machine useless. :-)

As for a short-term fix, there should be a backup of SYSTEM.DAT and USER.DAT (the registery database files) floating around in the same directory. ATTRIB -R -S -H *.DAT, then copy the backup files over the .DAT files. Sorry, I don't remember the extention of the backup files.