Yup M$ is planning with the release of XP SP2 Final to block & lock users out (even in safe mode) of their boxes. Right now as I gather this info it seems this applies mainly/only (not sure) to those that changed their product keys but didn't obtain a "640" PID & installed a pre final SP2.
The source is reliable (not me lol). I'm not going to name it. I'd just suggest taking precautions. Peace.