jpeg exploit and virus damage

About three weeks ago i got a trojan/hijacker virus thru msn while uploading a pic. Within a matter of hours there were 5 more of various types and 3 nasties, Sasser, Korgo and W32.spybot.
My nortons couldnt eradicate them but i eventually got hold of some removal tools and set about trying to repair the damage. All my programs had been uninstalled, some had files missing from them and shortcuts to others disappeared. I reinstalled XP and that helped but my nortons wont run at all.
I have uninstalled and when i tried to reinstall an error message said "the system administrater has put policies in place to prevent this istallation". I am the only user in the admin group and according to group and local settings i have no software restriction policies defined.
So i am left with no anti virus protection and i cant download the jpeg patch i need because everytime i try to use MS update it just gets to the scanning part and stops.
I have run hijack this on the advice of another member and would like your help as i suspect that sasser is still lurking and creating havoc. Thanx in advance for your help.

Logfile of HijackThis v1.97.7
Scan saved at 5:56:40 a.m., on 2/10/2004
Platform: Windows XP SP1 (WinNT 5.01.2600)
MSIE: Internet Explorer v6.00 SP1 (6.00.2800.1106)

Running processes:
C:\WINDOWS\System32\smss.exe
C:\WINDOWS\system32\winlogon.exe
C:\WINDOWS\system32\services.exe
C:\WINDOWS\system32\lsass.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\spoolsv.exe
C:\Program Files\Common Files\Symantec Shared\ccEvtMgr.exe
C:\Program Files\Common Files\Microsoft Shared\VS7DEBUG\MDM.EXE
C:\Program Files\Norton SystemWorks\Norton AntiVirus\navapsvc.exe
C:\Program Files\Norton SystemWorks\Norton Utilities\NPROTECT.EXE
C:\WINDOWS\System32\snmp.exe
C:\PROGRA~1\NORTON~1\SPEEDD~1\nopdb.exe
C:\WINDOWS\system32\ZoneLabs\vsmon.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\winlogon.exe
C:\WINDOWS\Explorer.EXE
C:\WINDOWS\Mixer.exe
C:\WINDOWS\System32\spool\drivers\w32x86\3\hpztsb07.exe
C:\Program Files\Common Files\Symantec Shared\ccApp.exe
C:\Program Files\Java\jre1.5.0\bin\jusched.exe
C:\WINDOWS\System32\ctfmon.exe
C:\Program Files\Spybot - Search & Destroy\TeaTimer.exe
C:\WINDOWS\Program Files\Microsoft Office\OFFICE11\ONENOTEM.EXE
C:\Program Files\Zone Labs\ZoneAlarm\zapro.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Program Files\MSN Messenger\msnmsgr.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\WINDOWS\Program Files\Microsoft Office\OFFICE11\OUTLOOK.EXE
C:\Documents and Settings\margaret\My Documents\HijackThis.exe

R0 - HKCU\Software\Microsoft\Internet Explorer\Main,Start Page = http://www.google.co.nz/
O2 - BHO: (no name) - {06849E9F-C8D7-4D59-B87D-784B7D6BE0B3} - C:\Program Files\Adobe\Acrobat 6.0\Reader\ActiveX\AcroIEHelper.dll
O2 - BHO: (no name) - {53707962-6F74-2D53-2644-206D7942484F} - C:\PROGRA~1\SPYBOT~1\SDHelper.dll
O2 - BHO: (no name) - {BDF3E430-B101-42AD-A544-FADC6B084872} - (no file)
O3 - Toolbar: &Google - {2318C2B1-4965-11d4-9B18-009027A5CD4F} - c:\program files\google\googletoolbar1.dll
O3 - Toolbar: Norton AntiVirus - {42CDD1BF-3FFB-4238-8AD1-7859DF00B1D6} - C:\Program Files\Norton SystemWorks\Norton AntiVirus\NavShExt.dll
O3 - Toolbar: &Radio - {8E718888-423F-11D2-876E-00A0C9082467} - C:\WINDOWS\System32\msdxm.ocx
O4 - HKLM\..\Run: [NvCplDaemon] RUNDLL32.EXE C:\WINDOWS\System32\NvCpl.dll,NvStartup
O4 - HKLM\..\Run: [C-Media Mixer] Mixer.exe /startup
O4 - HKLM\..\Run: [TkBellExe] "C:\Program Files\Common Files\Real\Update_OB\realsched.exe" -osboot
O4 - HKLM\..\Run: [HPDJ Taskbar Utility] C:\WINDOWS\System32\spool\drivers\w32x86\3\hpztsb07.exe
O4 - HKLM\..\Run: [NeroCheck] C:\WINDOWS\system32\NeroCheck.exe
O4 - HKLM\..\Run: [ccApp] "C:\Program Files\Common Files\Symantec Shared\ccApp.exe"
O4 - HKLM\..\Run: [ccRegVfy] "C:\Program Files\Common Files\Symantec Shared\ccRegVfy.exe"
O4 - HKLM\..\Run: [KernelFaultCheck] %systemroot%\system32\dumprep 0 -k
O4 - HKLM\..\Run: [SunJavaUpdateSched] C:\Program Files\Java\jre1.5.0\bin\jusched.exe
O4 - HKLM\..\Run: [nwiz] nwiz.exe /install
O4 - HKCU\..\Run: [CTFMON.EXE] C:\WINDOWS\System32\ctfmon.exe
O4 - HKCU\..\Run: [SpybotSD TeaTimer] C:\Program Files\Spybot - Search & Destroy\TeaTimer.exe
O4 - HKCU\..\Run: [NvMediaCenter] RUNDLL32.EXE C:\WINDOWS\System32\NVMCTRAY.DLL,NvTaskbarInit
O4 - Global Startup: Microsoft Office OneNote 2003 Quick Launch.lnk = C:\WINDOWS\Program Files\Microsoft Office\OFFICE11\ONENOTEM.EXE
O4 - Global Startup: Microsoft Office.lnk = C:\Program Files\Microsoft Office\Office10\OSA.EXE
O4 - Global Startup: ZoneAlarm Pro.lnk = C:\Program Files\Zone Labs\ZoneAlarm\zapro.exe
O8 - Extra context menu item: &Add animation to IncrediMail Style Box - C:\PROGRA~1\INCRED~1\bin\resources\WebMenuImg.htm
O8 - Extra context menu item: &Google Search - res://c:\program files\google\GoogleToolbar1.dll/cmsearch.html
O8 - Extra context menu item: Backward &Links - res://c:\program files\google\GoogleToolbar1.dll/cmbacklinks.html
O8 - Extra context menu item: Cac&hed Snapshot of Page - res://c:\program files\google\GoogleToolbar1.dll/cmcache.html
O8 - Extra context menu item: E&xport to Microsoft Excel - res://C:\PROGRA~1\MICROS~3\OFFICE11\EXCEL.EXE/3000
O8 - Extra context menu item: Si&milar Pages - res://c:\program files\google\GoogleToolbar1.dll/cmsimilar.html
O8 - Extra context menu item: Translate into English - res://c:\program files\google\GoogleToolbar1.dll/cmtrans.html
O9 - Extra 'Tools' menuitem: Sun Java Console (HKLM)
O9 - Extra button: Research (HKLM)
O9 - Extra button: Related (HKLM)
O9 - Extra 'Tools' menuitem: Show &Related Links (HKLM)
O9 - Extra button: Messenger (HKLM)
O9 - Extra 'Tools' menuitem: Windows Messenger (HKLM)
O16 - DPF: {01FE8D0A-51AD-459B-B62B-85E135128B32} (DD_v4.DDv4) - http://www.drivershq.com/DD_v4.CAB
O16 - DPF: {0D6709DD-4ED8-40CA-B459-2757AEEF7BEE} (Dldrv2 Control) - http://210.80.76.119/object/Dldrv.ocx
O16 - DPF: {166B1BCA-3F9C-11CF-8075-444553540000} (Shockwave ActiveX Control) - http://fpdownload.macromedia.com/get...irector/sw.cab
O16 - DPF: {56336BCB-3D8A-11D6-A00B-0050DA18DE71} (RdxIE Class) - http://software-dl.real.com/31175f4a...p/RdxIE601.cab
O16 - DPF: {6414512B-B978-451D-A0D8-FCFDF33E833C} (WUWebControl Class) - http://v5.windowsupdate.microsoft.co...?1093782440354
O16 - DPF: {9F1C11AA-197B-4942-BA54-47A8489BB47F} - http://v4.windowsupdate.microsoft.co...137.3074884259
O16 - DPF: {A8658086-E6AC-4957-BC8E-8D54A7E8A790} (GDIChk Object) - http://www.microsoft.com/security/co...I/0/GDIChk.CAB
O16 - DPF: {D27CDB6E-AE6D-11CF-96B8-444553540000} (Shockwave Flash Object) - http://download.macromedia.com/pub/s...sh/swflash.cab
O16 - DPF: {F00F4763-7355-4725-82F7-0DA94A256D46} - http://www2.incredimail.com/contents...r/imloader.cab
O17 - HKLM\System\CCS\Services\Tcpip\..\{04794660-B6ED-4FF8-A0BF-1AAEF5FE5BBB}: NameServer = 202.27.158.40 202.27.184.3
O17 - HKLM\System\CS4\Services\Tcpip\..\{04794660-B6ED-4FF8-A0BF-1AAEF5FE5BBB}: NameServer = 202.27.158.40 202.27.184.3

Hi rogue_red

Go here and run the free on-line virus scanners:

http://housecall.trendmicro.com/

http://www.pandasoftware.com/actives..._principal.htm

It wouldnt be a bad idea to run Stinger:

http://vil.nai.com/vil/stinger/

It will find and kill the most popular viruses.

The version of hjt you are using is out of date. The latest version can be downloaded from here:

http://allsecpros.com/

or

http://www.majorgeeks.com/download3155.html

Have you run Adaware SE?