The heck?
If anyone still cares, I did sort everything out, and gave the laptop to someone who really needed it. The trouble stemmed from a CD Rom copy protection scheme called Starforce, which installed itself with a collection of classic Namco arcade games. Ironically, I got this game CD for free as the local game shop didn't have it in their computer system, and the sales guy just gave it to me. Sounds like a sinister plot now.
AFAIK, it never bothered my Dad's old Windows XP machine.
http://www.glop.org/starforce/
How I figured this out, I don't even remember now. I destroyed the CD, but kept the classic 80's tunes that played over the game menu screen. :)