1. "OneCare will restart your computer in 6 hours." "Ok, restart now."
2. Reboot, log in as normal, hang about 10 seconds upon getting a working desktop (no mouse, no nothing).
3. Reboot to Safe Mode, msconfig to not load start up items.
4. Reboot to Normal Mode successfully.
5. Run Windows Live OneCare Cleanup Tool v1.1 successfully. msconfig to load start up items as normal.
6. Reboot, still have same problem.
7. After trying process of elimination many, many times (via a safeboot -> msconfig -> reboot -> did it work? --> nope -->safeboot cycle), I have determined that the culprit for the hang was:
sm56hlpr.exe
(?!)
In any case, it's not OneCare's fault, and that my issues occurred during OneCare's reboot is an unfortunate coincidence.
Apparently, this executable has something to do with the modem that's built into my machine (unused). Not sure what unholy things it is doing or what caused to spontaneously combust, but, at least this posting will get out there and hopefully save somebody some heartache in the future.