Macbook Pro won't load past a grey screen on startup!

I apologise for what will most likely be an essay ahead.

I have a Macbook Pro (2.16ghz) that is just over three years old. It is running on Leopard with all the up to date patches / updates. Over the past week or so, it has been 'playing up' in the sense that the spinning loading icon would appear at random intervals and stay there for a good 20 to 30 seconds or so, not allowing me to do anything. If I would be listening to music, the music would pause and then come back on.

It would normally appear when something was trying to load. For example, the final straw was when I was using Adobe Bridge and it was taking an extremely long time to load up the photos I had imported and in the end I gave up. Speed has never been an issue before and my MBP has 2GB of RAM.

So I backed up what I needed and proceeded to do an 'Erase and Install(Leopard) format. Once formatted, the MBP booted up and I completed the registration, took my User picture blah blah etc. Once done, the MBP booted into OS X - this is where the problems occurred. The spinning loading icon appeared and after about 30 seconds or so, the Finder window / toolbar at the top disappeared, as did the Macintosh HD icon on the desktop. All I was left with was my wallpaper and Dock with icons in. However, if I clicked on any of the programs, nothing would happen.

Naturally, I tried restarting it and the same thing happened again. I figured that because my MBP was connected to a second Dual monitor, that this might have been the issue so I decided to boot from the OS X Leopard CD and do another 'Erase and Install'. I once again got past the registration screen, but this time, instead of booting into OS X my MBP stuck itself on a grey screen. It would not go any further.

I then decided that the spinning loading icon issue may be a RAM problem. When I first got my MBP, I upgraded the RAM so I knew how to take it out and replace it. So I tried taking out the RAM stick (1GB) I put in orignally and booting it with the original 1GB stick. The same problem occurred. I tried the other way round, putting in my 1GB RAM stick and taking the original out - nothing worked. I tried every possible combination, even swapping the sticks around.

Eventually my brother tells me he has some spare RAM which I also try and once again, this does not solve the issue. So I figure it cannot be a RAM problem.

So next I try booting from the OS X Disc on startup and run Disk Utility. I verify and repair the Mac HD which comes up fine. No errors, no issues, nothing.

I finally scour the internet for info on what could be the cause of the problem and the biggest suggestion seems to be formatting. So I once again try formatting my MBP for a third time - however this time, I get the original problem. It boots up into OS X but then the Finder toolbar and Mac HD icon disappear, leaving me with Dock and Wallpaper.

The final thing I try is resetting the MBPs PRAM on startup. This does not solve the issue.

So here I am. If you could be bothered to read all of that, well done haha I'm not sure if I could have.

If anyone has ANY suggestions or advice, please post!

I do not have Apple Care so if I was to take it to the local Genius bar, would they look at it for free and diagnose it? Or would that cost me? I have never had to take my MBP in before.

Thankyou again