I'd like to verify what peterh said earlier in this thread:
Sometimes it takes a LONG time for SP 2 to finalize after the initial reboot.
I had a user today who called me up freaking out because her machine was now just sitting at a blank windows screen after login. No icons, no task tray.
After reading this thread I told her to just login and let it sit at that blank windows screen for 15-30 minutes. Sure enough, 15 minutes later she called me back and reported that it finished whatever it was up[censored] and everything came up normaly.