UserInit = c:\windows\system32\winlogon86.exe
UserInit = c:\windows\system32\userinit.exe
Offline NT Password and Registry Editor can be used http://pogostick.net/~pnh/ntpasswd/
However, if you are already in the loop and can't get to the registry to make the change, here is something I found in another forum that helped me:
Put in your Windows Disc and boot into Repair, you will see a dos mode, press “1″ go into “C:\Windows” directory and type in your user/admin password.
after that go into your “System32″ folder by typing “cd System32″ without “quotes”
then enter in:
“copy winlogon.exe winlogon86.exe” and
“copy winlogon.exe winupdate86.exe” <— just incase
type: "exit" to restart
But, in the end, after you are able to kill the winsetup86.exe process, make sure and run malwarebytes AND update to Win XP SP3. I had to both to keep the problems from coming back.