After banging my head on the wall many times about this, going through all the suggestions 
posted above didn't help. I checked all the registry "InitialKeyboardIndicators" 
entries were set to "0", I deleted the user profiles from the "Document and Settings" 
so that they are recreated and everything started fresh AND STILL the Numlock came 
on at Logon. 

However, eventually I figured out that I had a group policy buried somewhere in my 
domain controller's Active Directory running a vbs script to turn on the numlock... 
DUH! I forgot I had added this a long time ago to my Active Directory so I just restricted 
the username that logs on to the laptops so that the policy doesn't apply to that 
user. However, I want the other users on regular desktop computers to have Numlock 
on automatically. But for the laptop user, adjusting the group policy properly took 
care of this annoying problem.

I just think this is something to look at in case anyone of you has a domain environment.

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