Someone asked about how we got rid of the spyware / viruses.
After trying various methods (and none of those working), I decided that it would be much easier just to reinstall xp - but this time to include service pack 2 - and to stay far far away from windows explorer.
1) I made sure all the important files were backed up - emails, code, programs I own that are downloads only, passwords etc. I backed all these up to an external hard drive. You don't want to back up settings etc., because these might have been compromised by the malware.
2) Check again to make sure you have everything. Don't forget your bookmarks, you may also want to include your address book.
3) Format the hard drive. There is a fast method - which I've found doesn't do the job, and a slow method.
4) Reinstall XP
5) Reinstall all the drivers and programs that came with the computer.
6) Install and update your virus protection / firewalls.
7) Install SP 2.
8) Download any additional windows updates.
9) Install your other programs and make sure they work.
10) Run a virus scan.
11) Take a break.
12) Setup your email.
13) Install Mozilla.
I have a slow internet connection - not by choice we just live in the boonies - the whole process took about six hours or so. I figure though that it was time well spent since my computer runs faster and the spyware doesn't take over things (knock on wood).
I had the leisure of planning my reinstall. Sometimes you won't have that luxury. Make sure if you haven't backed up things in a while that today (or this week) you do it.