I recently installed FS2 and when I rebooted my computer with it installed, it froze at the Welcome screen. Tried rebooting again and it said that a system32 file was corrupted. I have the feeling that FS2 may have caused this because my PC was working fine before installing it...which is a shame because I enjoyed the game. Has anyone else had this issue?

Did you install any 3rd party mods with freespace 2?

If all you did was install FS2, then it was not the cause of the problem. The FS2 install does not touch any of the files in System32 that would be associated with booting your machine.

I installed the open source mod because vanilla FS2 was choppy.

The file placement of the game and fs2 mod cannot conflict in anyway with your system32 folder. Though you can corrupt a file by shutting down windows improperly or even halting certain types of executable files while running.
Fs2 comes currently in 3 versions, 2 are beta one is there standard "we know it works" version. Each version has there own Media_VP files specifically made for that version. Not to mention the 10+ launcher versions.
If you have the wrong combination the game will not work at all. All these files are fully contained inside your Freespace 2 install directory. Not one single file is placed or uses anything in system32.

If it was just the freespace 2 open mod I don't think that would have done it, alot of people also seem to be using that mod without any problems.
Scanned your computer for viruses recently? Freespace 2 may have been the last file you installed yourself but if you picked a virus up from the net that could cause problems.

Hang on there. As one of the senior troubleshooters over on HLP, I have to correct this. Right now, there is ONE (and only ONE) version of FS2_Open that people who are not seriously into FS2_Open modding should use. That version is 3.6.10 FINAL.
There is ONE and only ONE Launcher that people should use, and that's the 5.5e one, which was released with 3.6.10 FINAL.
http://www.hard-light.net/forums/index.php?topic=64520.0
There is ONE and ONLY ONE version of the mediavps that people should use, more precisely, the 3.6.10 Re-release ones with the patch associated with it.
[url=http://www.hard-light.net/forums/index.php?topic=65038.0
This is mostly correct. Neither FS2 nor FS2_Open will do anything to your system32 directory.