I'm suffering from the same issues, and strangely enough if I go back and set everything back down I STILL can't get past the login screens, I've done full system restarts, driver updates, nothing.
Curse my vanity for higher resolution.
As far as my system details:
Win 7 64-bit
Radeon 4870
8 Gb ram
Wolfdale 3.66mhz CPU
Dual monitor Setup
I don't think Aero or even my Deskscapes is the issue, because it was running while on 800x600, and it's not like somehow my computer is chocking on the performance demand. I think there's something that gets irrevocably altered when you touch the config file.
Has anyone figured out a simple edit in an .ini file instead?