Vista - Windows hangs on startup

Hello
I am having a problem starting my computer. It loads fine up until it asks for the account user login. When I log in, the desktop starts to load and then freezes. I can see a 'greyed out' desktop, sometimes some icons and sometimes not. I can see from the lights on my box that the keyboard and mouse have loaded but I can't use either of them. There are no 'code lights' for hardware failure.
I'm left with no option but to hold the power button down and restart that way. This wreaks havoc with my RAID mirror configuration (yeah, bad choice, I know, but if I break the RAID, Dell says it my warrantee will not support it) which takes around 4 hours to re-verify.
I have called Dell three times now and they have done hardware diagnostics and are confident I have no virus (I have Norton Security and Antivirus) and we have done 2 Factory Image reinstalls. In both instances, these have worked up until I have downloaded and installed updates from Windows with my Windows Automatic Update. I believe in both instances, the updates came through the week of November 25th and are the updates to the help files for Microsoft Office and 3 Vista Security Updates.
The last time it happened, I had shut the computer down before going away and turned it back on on the 27th when I came home after doing the first Factory Reinstall. It worked fine.. absolutely fine until it downloaded these updates again and then froze on startup. This time I was able to go into Safe Mode (the last time even that didn't work) and restore to a system check point earlier in the day.
It has now restarted and is working fine, just I notice it's using a bit more RAM than I'm used to seeing.. 40% plus ralther than the 25-35% before. I have reloaded (again) hours worth of photos and music and frankly, am afraid to shut it down.
My questions are these:
Has anybody had this problem with updates? If so, which ones and what to do about it? I have my Auto Update shut OFF right now but realise that I can't not download security updates, but which ones?
Dell XPS support have been very good and have worked through the problem with me but they say that since this is probably not a hardware problem, they want me to phone the software support line and pay a fee.

Are there any logs or events I can look at to help me suss this out? It seems Vista has enough stuff monitored so that I should..
Can anyone help? I am reasonably good with computers, but the last one I took apart and messed with the innards was Windows 3.1, some of this has gone past me..
Thanks

I have had a issue with a none critical updates stuffing up my OS and had to reinstall (pre SP1) before but for myself as a general rule i only allow the OS to install critical updates only and nothing else. So far this has kept me going strong.