Sometimes the wood can't be seen for the trees :rolleyes:
I had another root around and what did I find? In system configuration there is a tab called "boot", and safe boot was ticked/checked. I unticked it, restarted and guess what? Windows boots normally.
So there we have another thing to look out for if someone else ever has this kind of problem :)
Thank you so much guys! A special thank to techallenged Life saver :) My desktop all of the sudden would only boot on the safe mode. Tried several times to restore unsuccessfully. Now it is OK