Recently my Vista OS got in to a endless reboot, most probably because it was restarted while installing a live update. When that happens, nothing works, including safe mode. Also figured out that if you have a Linux partition, Vista installations fail with a blue screen.
So rule number 1, Make sure you stop installing live updates automatically.
Above problem can be fixed by deleting the pending.xml file—which lists TODO when a machine bootup, which is at C:\Windows\winsxs\pending.xml. Simply boot with Ubuntu live CD and delete it. This and this give more details.