This is an excerpt from this Microsoft Answers post.
Windows Live Media have these four dll's linked to them;
C:\Windows\System32\ntdll.dll
C:\Windows\System32\wow64.dll
C:\Windows\System32\wow64win.dll
C:\Windows\System32\wow64cpu.dll
Manually register the dependent .dll files for this error and see if this resolves the issue.
To do this, click the Start ORB / in the Search Line Type Command
/ Right Click on the Command Prompt from the programs list / Select RUN AS ADMINISTRATOR
.
In the command prompt type regsvr32 /s ntdll.dll
and hit enter,
then regsvr32 /s wow64.dll
and hit enter,
then regsvr32 /s wow64win.dll
and hit enter,
then regsvr32 /s wow64cpu.dll
and hit enter.
You've not answered whether Windows works normally in Safe Mode. It is recommended you try as @pincopallino suggests to run
sfc /scannow
while in Safe Mode. After that, try uninstalling Windows Live Essentials and reinstall it.
If you are still having trouble after that, you may want to do a factory recovery to start from a fresh install of Windows.