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I recently installed WinXP SP1 and have encountered an annoying problem... about half of the time when I shut down, it just hangs at the desktop screen.
Usually it takes like 20 secs or so then goes to the light blue 'Saving your settings' screen then shuts down.
Sometimes, I have to manually shut it down because it just freezes there.
I can't uninstall SP1 (had no room to archive the uninstall files)... and either way, I'd rather fix the problem than just format or uninstall something..
I had the same problem and it turned out to be the itouch software for my Logitech keyboard. I uninstalled it and went back to Logitech iTouch 1.83, problem solved.
Also you could try going back to a restore point before that happened.