My network job at my school deals with fixing dorm users computer problems like this.
Easy solution? Reformat, reinstall.
I suppose you should try Lavasoft's Adaware and Norton Antivirus 2004, if you haven't already. They're the best. Make sure to update both programs before running their scans, otherwise it's rather pointless. For Norton you should set it to delete, rather than repair. For Adaware, under the options page enable all "Scanning settings", and under the tweak page, go to the "cleaning engine" node and enable "automatically try to unregister objects prior to deletion."
None of this is guaranteed to work, and in the most severe situations I've come across, that sound like yours, I just recommended the user to reformat. At least everything is clean when you start.
Get to that Easy CD Creator software and make some backups of important data.
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