Using Offline NT Password & Registry Editor and customized VMware image of Windows XP it is shown that an attacker is capable of changing the registry and parts of the Operating system.
Registry edit consists of making a short batch script (which outputs "Hello world" to the screen) started after user logs on. It's just a proof of concept, an attacker could instead inject trojan or rootkit to the attacked system.
Recorded and edited using Camtasia Studio.
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