Can't access new user accounts after reinstall of XP and IE update

I posted this in the IE General group but think it is probably an XP issue.

I did a format/reinstall of XP on a Dell laptop recently. Had no problems
with the installation, updated to SP3 and all security hotfixes. Installed
IE8, also no problems. However, when I create a new user account (either
limited or administrator) and switch to it, it hangs with a "Setting up
personalized settings for : Internet Explorer" dialog box. There are a
number of processes running, most notably "ie4uinit.exe" (which I can't
kill).

I have tried deleting and recreating the new user accounts from scratch,
with no joy. Can anyone shed some light onto this?

Thanks
Mark