I've been using QGis for quite a few years. I normally update QGis to the latest version once it is released on qgis.org, without uninstalling previous versions. I've never encountered any problems doing this.
I recently installed 2.8.1 and it was working fine. I thought I'd fiddle with a bit of customization of QGis by way of switching off certain toolbars, menus, setting a default project to open, etc, for someone to use QGis as a simplified viewing tool for gis data. I decided to try this on one of the older versions (chugiak). It seemed to work ok while in the program, and even while restarting the program. At some point, not sure whe, possibly on a reboot, or when I tried using 2.8.1 again I got an error (screenshot attached).
Since then I've tried everything I can think of. Reinstalling, uninstalling all versions and reinstalling 2.8.1. Still didn't work. I even tried deleting the windows registry variables pertaining to QGis (I may not have done this completely correctly) and again reinstalling, yet I still get the same error.
I get the splash screen, and I can see this screen saying things like "setting up gui", "loading plugins", etc. I don't get to the tips screen and the program gui doesn't come up.