I had the exact same problem recently. No desktop icons, no start menu but otherwise the computer seems to work fine. Most applications (including command prompt) can be loaded via task manager. I also lost my restore points so that option wasn't available to me.
My solution was as follows;
Checking the event log I noticed that Word had crashed (application hang), the next entry showed a disk error and subsequent auto repair by windows. This is where the problem started.
Windows had found invalid entries for explorer.exe and in the repair process deleted explorer.exe! This is why I had no desktop or start menu because while windows was loading it could not find explorer. Note: you will find reference on other internet blogs about just manually loading explorer.exe - my problem was the file didn't exist anymore.
So i expanded explorer.ex_ and explorer.sc_ from the cabinet files in c:\i386 folder. NB These files must be copied into "C:\windows" folder not system32.
Once I had done this windows started as normal. I have had to re-install another program that was also trashed but at least I avoided a total re-install of Windows and all apps.
I hope my solution helps others who may read this thread with a similar problem. PC
PS A bouquet of stinging nettle to Bill Gates team for allowing a crucial operating system file to be trashed so easily.
