**Core Concept**
HIV infection can lead to various late central nervous system (CNS) complications due to direct viral effects or immune-mediated damage. The most common late CNS complication of HIV is associated with the depletion of CD4+ T cells in the brain, which compromises the blood-brain barrier and leads to opportunistic infections or tumors.

**Why the Correct Answer is Right**
The most common late CNS complication of HIV is Toxoplasmic encephalitis (TE). This is caused by the protozoan parasite *Toxoplasma gondii*, which is reactivated in immunocompromised patients. The parasite invades the brain, leading to necrotic lesions and inflammation, particularly in the periventricular regions. The pathogenesis of TE involves the breakdown of the blood-brain barrier, allowing *T. gondii* to infect the brain. This is facilitated by the decreased expression of tight junction proteins, such as occludin and claudin-5, in brain endothelial cells.

**Why Each Wrong Option is Incorrect**
* **Option A:** Cryptococcal meningitis is a common CNS complication of HIV, but it is more commonly seen in patients with lower CD4 counts. It is caused by the fungus *Cryptococcus neoformans*, which primarily affects the meninges and is less likely to cause necrotic lesions compared to TE.
* **Option B:** Progressive multifocal leukoencephalopathy (PML) is a rare CNS complication of HIV caused by the JC virus. It leads to demyelination and axonal loss in the white matter, which is distinct from the necrotic lesions seen in TE.
* **Option D:** HIV-associated dementia (HAD) is a form of cognitive impairment seen in patients with advanced HIV infection. It is characterized by memory loss, difficulty with motor function, and personality changes, but it is not typically associated with the formation of necrotic lesions.

**Clinical Pearl / High-Yield Fact**
In patients with HIV, the CD4 count is a crucial determinant of the risk of developing CNS complications. A CD4 count of <100 cells/μL is associated with an increased risk of TE, while a CD4 count of <50 cells/μL is associated with an increased risk of PML. **Correct Answer:** C. Toxoplasmic encephalitis.