I did set up a workaround for the bug.
I set LiteStep as my shell. I made an MS-DOS batch file that bangs LiteStep with a !Quit command, so that LiteStep stops without generating an error message, and I put it into C:\Documents and Settings\Myself\Start Menu\Programs\Startup.
The stage where the startup folder is executed comes before the stage of the crashes.
I run Emerge Desktop not-as-shell strictly as an alternative to LiteStep's popup module, and Emerge Desktop is loaded from the startup folder.
(Yes I did test LiteStep without Emerge Desktop. That's been done already.)
So after LiteStep checks out, I call it up again with the Emerge Desktop launcher.
I have embarked on all of this installing and configuring of LiteStep because Emerge Desktop insists on quashing the Explorer taskbar. I love Emerge Desktop as a launcher only, and I hate iconizing taskbars. LiteStep is now serving as a non-iconizing taskbar for me, plus a clock and a system tray.
LiteStep is great actually. But you have a bug there.
In LiteStep, I load jdesk-0.711, xtaskbar-1.1.5, vtray-1.10, and kclock-1.6b (none of which apparently were making it crash).
Kclock is an old component that I found at shellfront.org that I learned how to configure.