This is a weird one, I've never encountered this before.
The PC boots up normally, up to the desktop. That is when the weirdness starts. Mouse moves ok, but double clicking on program icons, selecting them from the start menu doesn't do anything. Can't start task manager either, whether by right clicking on the task bar or ctrl-alt-del. Nothing left to do but to shut down. Even then it doesn't shut down properly, the desktop icons and task bar disappears but the wallpaper remains.
PC starts fine in safe mode though, and I think it works as it should there.
The only thing that I can recall being done to the PC recently was an automatic Windows update yesterday.
Any ideas where to start to troubleshoot?
Running Win7 Home Premium edition.
Thanks.

Well if you can get into safe mode try either chkdsk /f or sfc /scannow in a cmd prompt you should also have admin rights in the prompt

Thank you Nephilim. I ran an anti-virus scan in safe mode, nothing reported. Then shut down the PC and restarted a while later, everything now works properly.