Those who continue to use Windows XP should know sometimes it will damage a user profile. The usual care is to just create a NEW user. 

This MATERIAL below  was copied from Microsoft .
http://support.microsoft.com/kb/555473
Quote

Microsoft will end support for Windows XP on April 8, 2014
How to recover the damaged user profile in Windows XP
When you log on to your account, you may receive the
following error message:
The system has recovered from a serious error. User profile
is damaged.
You may also notice all the user documents, Outlook,
Internet Explorer, and .NET settings missing.
The solution recommended in the following Knowledgebase
article will resolve the issue:
http://support.microsoft.com/default.aspx?scid=kb;enus;326688
However, the solution recommended in the above article
suggests to copy the settings manually. ALTERNATIVELY, you
can follow the below solution:
Create a new user account:
Go to Control Panel.
Click User Accounts tool.
Select the Create A New Account link.
Give the account a name and click Next.
NOTE: Ensure that the account type is Computer
Administrator (You can see the option button displayed in the
process.)
Click Create Account button.
Logoff from the current account, and login with the new
account. This will create a user profile for the new account.
When the user profile creation procedure is complete log Off
from the account without doing any other modifications.
Login to the old account again and PERFORM the following:
Right-click My Computer, and select Properties.
Select the Advanced tab.
Click the Settings button in the User Profiles section.
Select the user account that was corrupted.
Click the Copy To button.
Click Browse button and then browse For Folder dialog box
to locate the Documents and Settings folder and select the
new account.
A confirmation dialog box should appear that informs you
that the original files will be deleted and prompts you to
confirm the copy operation. Click Yes.
Once the profile is copied, log off from the system and login
again with the new username. All the settings of the old
account will be copied.
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Article ID: 555473 - Last Review: October 11, 2005 -
Revision: 1.0
APPLIES TO
Microsoft Windows XP Home Edition
Microsoft Windows XP Media Center Edition 2002
Microsoft Windows XP Professional
Microsoft Windows XP Service Pack 1
Microsoft Windows XP Service Pack 2
Microsoft Windows XP Tablet PC Edition
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