It is odd that you could sign in by way of safe mode if the user profile service failed, that is usually a fairly bad error requiring a new account be created.
I would try to enable the Administrator account with the following command from your personal account in Safe Mode (you could also try it as Guest if you have trouble signing into your personal account): http://www.howtogeek.com/howto/windows-vista/enable-the-hidden-administrator-account-on-windows-vista/
net user administrator /active:yes
This would give you a more powerful account than Guest. Administrator should now show up on the Welcome screen.
Then try again to create a new account working from the Administrator account to be used as a backup.
If you have a blank CD, you could also create a repair disc by typing
Create into the Start/Search box the selecting
Create a Repair Disc. This would give you access to basic functions if something goes wrong with chkdsk.
Then I would run a chkdsk on the C: drive to see if it is a fileystem error. Right-click the C: drive in Computer and select Properties. Under the Tools tab hit Check Now. Tick both boxes and hit the Start button, it will schedule for next boot so reboot and let it run (about 1/2 an hour for stage 4, so do it when you have time to wait). See if it you can log in normally.
If you are still having problems you could try a System Restore form either the new account or the Repair Disc.