First place would be to check for anything malicous. Do a virus and spyware scan. You can get some free ones here:
AVG Free Edition and
Spybot Search and Destroy. Check removeable media and other drives inase something has been left out by the format.
If you're still having problems update windows or probably easier still get
Windows XP SP2. You should be able to get a free CD ordered from the MS website.