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As a last resort... I backed up all my stuff just in case from Safe Mode.
Then this is what I did to fix it:
From safe mode, I rebooted from the leopard dvd, and re-installed it, with an "Archive and Install".
After installing/booting up, I had to do many updates, including firmware, but it runs like a charm. Looks like it was a corrupt system folder.
Hope this helps for others. Nothing has been deleted, all my documents,settings, etc were still intact when chosing "keep existing user account" on above installation.
Cheers
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