Try holding the shift key down as you login (wait until the login process has finished before releasing it - assuming it actually does!). This will stop any applications in your login items from loading and also any third party menubar hacks. If that works, then one of your third party hacks/apps is borked and needs to be updated/reinstalled or removed.
If that doesn't work, reboot and hold the shift key down as the system starts up - this will disable any third party extensions to the system. If that works, then you must have installed some third party software recently that is incompatible with the OS (or vice versa - did you update the OS recently?). Check for updates to any apps to see if a later version is available.
If that doesn't work, my next guess would be a corrupt font (or fonts) which will be difficult to troubleshoot unless you have another system to connect to in e.g. Firewire target disk mode. If you don't, I'm afraid an archive and install is the next best thing to try. However, it would also be worthwhile simply booting from the installer CD/DVD and running Disk Utility to check the disk for damage before going down that route.
HTH
Edit: Also, the hardware test above is a good idea
