I had this same problem a while back. In my case it was due to a corrupt user account. I had to create a new account and transfer files from the corrupt account to the new one.
Information on transfer of files here:
http://support.microsoft.com/kb/811151
After creating the new account, msconfig worked fine.
Information on transfer of files here:
http://support.microsoft.com/kb/811151
After creating the new account, msconfig worked fine.