After spending way too much time and not really feeling comfortable that I knew what the root cause was or how many more hours I'd need to spend on it, I gave up and restored it back to a Ghost image I took before I gave my friend the brand new PC, last year. (I saved all of his data, but he'll need to reload his Apps, but I felt this was the best recourse).
Thank Heavens for Ghost Images / backups!!!!!

And thank you guys for all of your help.
I did install, update, and run al of the Anti- Visrus, Spyware, Adware, and Rootkit programs you recommended above, so hopefully this issue will not re-occur!

Thanks Again and happy New Year!