I myself have just came across this problem on my laptop. I decided to update my BIOS by flashing it and at first I thought "Ahhh, this seems all fine", it did it and rebooted automatically. I thought "Well that was quick and easy". The BIOS loading screen came up, then I saw the Windows XP loading screen, then boom. The wonderful quick glimpse of the BSOD (Blue Screen of Death). I tried in Safe Mode, nothing. Last Known Good Configuration, nothing. That was it... I was balls'd.
However upon starting in Safe Mode again, I noticed it say "Error Loading sptd.sys". Now from what I know, sptd.sys is something to do with Daemon Tools, so I didn't press anything during Safe Mode and hey presto Windows XP loaded. I logged in as Administrator and went to my Control Panel and Uninstalled Daemon Tools (and/or Daemon Tools Toolbar). After uninstalling that, I decided to search my drivers folder (C:\WINDOWS\system32\drivers) and deleted sptd.sys (You may have to goto Tools -> Folder Options -> View -> [Tick] Show hidden files and folders (and also the same for Hide protected operating system files)).
Once that was done, I simply rebooted as normal and the operating system loaded up absolutely fine - along with the updated BIOS too. I hope that helps anyone that's still having problems with this.