XP Home users without passwords now asked for passwords

Suddenly all users are required to enter a password at the 'welcome' screen.
Assuming no password is needed, hitting 'enter' results in the following
message "the system cannot log you on as the domain <computer name> is not
available". Using safe mode, I have tried setting passwords but when I return
to normal Windows the same thing happens (i.e. the system cannot log you on
....)even with the correct password.

Suggestions please to resolve this