Fast User Switching does not Work in Windows XP: Causes of the Problem and Rectification
There are many root causes to this problem. Most of them are related to the settings in the Windows, set either by you or by the administrator of the network on which you have your computer.
A) If you cannot see the Logoff link in the Start Menu, it means that the Logoff option has been disabled by the administrator.
If you are running Windows XP Pro on a standalone PC, you can go to the Run link in the Start menu and type in GPEDIT.MSC. This will open up the group policies window. Select the option Administrative Templates under the User Configuration and then click on the View Menu. Select Filtering and in the resultant dialog box, select “Show only Configured Policy Settings". If the option of disabling appears in the right pane, you can set it to off and then click OK. Close the GPEDIT Window. This will solve the problem for standalone PCs where somebody changed the settings.
For PCs on network, you will need to contact your network administrator.
B) If the Logoff link is present in the Start Menu, yet you cannot use the Fast User Switching chances are that your event log is full. To resolve this problem, right click on My Computer and click Manage. You will get Computer Management Window. Select the Event Viewer. In the right hand pane, right click on the Office Sessions and click on Properties. See if the option “Overwrite Events as Needed" is selected. If not, select the option and click OK. This will solve the problem. If the option is already selected, this is not the reason you are not able to use Fast User Switching.
C) Another cause is the setting of Windows Terminal Service. To check the status of the service, right click My Computer and select Manage. Expand Services and Applications. Click on Services link. Locate the service Terminal Service and see if it is set to automatic. If not, it is the problem. Set it to automatic and boot your computer. This will solve the problem.
D) If the step (C) is not the cause or it does not solve the problem, it means that there are some conflicting network devices on the computer. Remove all of them and reboot before reinstalling them. If the re-installation is smooth and does not show up any error message, try using the Fast User Switching. It should work. If it is not, then go to step E.
E) The Fast User Switching depends on several services that are configured by the Windows XP Installer. Check if you are using a genuine copy of Windows XP. To do this, go to the Windows Support site and verify if your copy of Windows XP is genuine. If it is, then re-installing the operating system will solve the problem. If the Windows Validation Tool reports that the copy of your Windows is not genuine, get into touch with the reseller and ask him for the genuine Windows Installation. A Genuine Windows XP installation will solve the problem of Fast User Switching by restoring all the necessary services on which the Fast User Switching is dependent.
Remember to back up all of your personal information and files to another drive before you reinstall your copy of Windows XP, or they will all be gone. An external drive is the safest place to put your backup..