XP SP2 freezes after Windows Update Reboot

I just reformatted my Win98 C: partition and did a
clean install of XP Pro. I used a brand new CD,
which includes the SP2 fixes in the installation.

Installation went well and I then installed McAfee
virus protection and then performed Windows Update.
The update completes fine and then asks if I want to
reboot. I click "reboot" and the machine reboots
fine but then hangs at the login screen (the machine
freezes right after the "enter password" box appears).
Power cycling the machine once or twice finally lets
me login.

I have run windows updates four times and this
happens every time. What is wrong?

Thanks,
Tony