"Profile 1" instead of last known config

Is getting "Profile 1" option in a reboot screen a
Microsoft thing or is it an indication of a virus?

My Windows XP Home, with the latest packages of MS
critical updates, crashed. When it tried to reboot
itself, it gave me a black DOS screen with white letters
that said it couldn't restart using the previous settings
& what did I want to do... and it recommended I
select "last known configuration that worked."

Only problem was that "last known config that worked" was
not on the list of options. The only option was "Profile
1" which was the default. I selected Profile 1... and
started having even more problems with crashing, MS Word
and getting on & off the internet. Shutting down the
computer is taking much longer now. Also, my computer
will no longer do a system restore even tho it says many
restore points are available.

I have done spyware and AntiVirus scans with the most up-
to-date products - all show nothing.

Has anyone else had this or knows what it means? Is
reformatting my computer the only solution?

thanks,
nuke

"Profile 1" instead of last known config