Start Shutdown Nothing Happens unless I wait until things to grey gray..?

If I press start, shutdown, nothing really happens. The desktop returns to normal, and no log off or shutdown occurs. When I wait for like 3-5 seconds, things gray out, then I can shut down. I thought it was just something specific to this computer, but every computer on our network is now doing this.

We have 2000 Pro server, 2gb ram, dual 1400mhz cpu, and raid hard drive. Anyone know why this is happening? Is it a windows update that caused it?

Thanks!