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can't help you with the 'confused desktop', but I do know that a fresh install of XP with only one user account (not counting the default ones) bypasses the logon screen at every startup. An exception to this is if the user account has a password attached to it. If you aren't getting the logon screen you could either set yourself a simple password, or enable the 'guest' account which would also force the logon screen to appear.
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