Actualy, another of my friend's computer gets this message at strat up "The aplication or dll C:\WINNT\system32\__c00798B8.dat is not a valid windows image. Please check this against your installation diskette." and when we hit the "ok" button it cycles through an endless list of applications,here are some of them:
manhattan:SBTV.exe
ctfmon.exe
hpcmpmgr.exe
Yahoo!Messenger:YAHOOM~1.EXE
HideWindow:devcheck.exe
hpotdd01.exe
BJCFD:CFD.exe


The computer takes almost literally hours to finish the startup process while many pop up windows show:

Spyware Doctor
Malicious Action Blocked

Spyware Doctor has blocked an application ***.exe attempting to access a file.
Path: C:\WINNT\system32\__c00798B8.dat

Threat: Trojan.Virtumode
Rissk: Elevated

His active desktop is gone, but we get that screen saying "Active desktop recovery>Restore my Active Desktop<"

It also takes years to shut down

I noticed he's got Live AntiSpy and Privacy Watch runing during the time of start up. I brought his computer to my home to see what I could do about it. I am still searchig for possible solutions. Do y'all think spybot and hijck this could do some good to his infected machine? What could be the nastie responsible for this problem?
ANy suggestions?