Actually this sounds a lot like a corrupted local user profile issue. When you log on to a Windows PC for the first time it creates a folder in C:\Documents and Settings\[username]\ (which is actually a duplicate of a hidden folder at C:\Documents and Settings\Default User\). This folder contains all your files, user-specific registry entries, application data, and so on. Sometimes certain key files in this folder can get corrupted and unusable, and rather than lock you out entirely Windows creates a new local profile from scratch, normally by appending ".000" to the folder name. Naturally this folder will not contain any of your files, settings and the like - those are still stuck in your old, corrupted profile folder - but they're certainly not gone or unrecoverable.
So, first of all, go into My Computer and have a look in C:\Documents and Settings\ and see if there are two folders with your username on them (if so, one will have .000 appended). If so, you can just copy your files out of C:\Documents and Settings\[username]\My Documents\ into C:\Documents and Settings\[username].000\My Documents\ and all will be well. Other stuff that might be useful to copy is the contents of Desktop, for any user-specific desktop icons and files that are missing, Start Menu for user-specific program shortcuts, Favorites for your bookmarks (if you use IE), and the contents of C:\Documents and Settings\[username]\Application Data\ and \Local Settings\. These last two are normally hidden folders, so you may have to turn on display of hidden files in Folder Options to see them.
If this is what has happened, you shouldn't have lost any files and only a minimal amount of program settings and preferences.