Don't know if this will help now, but I do know that there were some problems with ArcGIS at 9.1/2/3 and Internet Explorer versions that actually caused this to happen (I can't remember which IE version--maybe 7). I experienced the same problem when the IT staff pushed out an automatic IE upgrade--next thing I knew, the tools wouldn't work. But it wasn't just confined to the Clip tool--If I recall correctly, I believe every tool in the toolbox (that we tried) resulted in ArcMap crashing. We tried from ArcCatalog too. Still crashed. The only solution was to uninstall ArcGIS, downgrade Internet Explorer, then reload ArcGIS. Then it would work. I'm not sure why there was such a catastrophic conflict between the two programs, but that's what we experienced.
Tyler