I recently had the same problem with my daughters Dell Laptop. I tried to restore and also repair Windows with no luck.

What you have to do is boot up using the Vista install disk, then select the DOS command line and go to c:\windows\system32 directory and rename msimg32.dll to msimg32.bak. After doing this you will find on the Windows install DVD a system32 directory. Go to that directory and copy msimg32.dll to c:\windows\system32. Once you have done this reboot the PC as normal. After the pc starts you can delete the msimg32.bak if you want.