"Services.exe application error. The instruction at "0x37001160" referenced memory at "0x37001160". The memory could not be "read". Click OK to terminate the program, click cancel to debug the program"
I spent a bunch of time looking around at other cases where the user had a 'Services.exe application error'. I haven't seen this exact error anywhere. The general advice I've seen given is that you need to re-install Windows. It seems to be a symptom of picking up some malware or virus. As you say you haven't done anything that's one thing I can assume.
Since you can't even access the desktop it sounds pretty severe. Take your Windows XP disk and boot the system with it. Then run an Repair Install. That should fix your basic system file and leave your application files and data intact.