Okay Okay... you can start flaming me after you figure out my problem >.< im only 15 and i'm not that great at computers

Recently my computer has been acting weird, freezing during game programs and of course weird things going on. after downloading AVG free edition. ( i will list below step by step of my actions )

1) check up-dates for AVG (downloaded it)
2) Scan full system
3) 6 threats! 3 Obfustat.IQC and 3 Obfustat.IHB and importantly 2 of the files have infected
C:\Windows\system32\printer.exe & C:\Windows\system32\winavxx.exe
4) Then of course i clicked heal!
5)But then errors started coming up, i can't access some things like Control Panel or Properties!
6)So i restarted comp and rebooted with an error in my face "Can't Find C:\Windows\system32\printer.exe
7)I searched the internet for topics on this and read all of em.. still not sure what to do
8)I've read several articles of people posting their hijackthis log and asking for help.. which is one of my options
option a. post hijackthis log and ask for help
option b. run regedit and edit bunch of stuff i dont know
option c. start panicking and reformat comp...
9) after all that.. i've posted this with my hijackthis log

Hijackthis log:
Logfile of HijackThis v1.99.1
Scan saved at 5:01:42 PM, on 8/20/2007
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\Ati2evxx.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\Ati2evxx.exe
C:\WINDOWS\system32\spoolsv.exe
C:\PROGRA~1\Grisoft\AVG7\avgamsvr.exe
C:\PROGRA~1\Grisoft\AVG7\avgupsvc.exe
C:\PROGRA~1\Grisoft\AVG7\avgemc.exe
C:\Program Files\Comodo\Firewall\cmdagent.exe
C:\WINDOWS\Explorer.exe
C:\Program Files\ATI Technologies\ATI.ACE\cli.exe
C:\WINDOWS\SOUNDMAN.EXE
C:\Program Files\Java\jre1.6.0_01\bin\jusched.exe
C:\Program Files\QuickTime\qttask.exe
C:\Program Files\iTunes\iTunesHelper.exe
C:\PROGRA~1\Grisoft\AVG7\avgcc.exe
C:\Program Files\Comodo\Firewall\CPF.exe
C:\Program Files\ATI Multimedia\main\ATIDtct.EXE
C:\Program Files\ATI Multimedia\RemCtrl\ATIRW.exe
C:\Program Files\Google\GoogleToolbarNotifier\GoogleToolbarNotifier.exe
C:\Program Files\Messenger\msmsgs.exe
C:\Program Files\Veoh Networks\Veoh\VeohClient.exe
C:\Program Files\ATI Technologies\ATI.ACE\CLI.exe
C:\Program Files\iPod\bin\iPodService.exe
C:\WINDOWS\System32\rundll32.exe
C:\WINDOWS\System32\wuauclt.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\PROGRA~1\Grisoft\AVG7\avgvv.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Documents and Settings\Jeremiah\Local Settings\Temp\Temporary Directory 1 for hijackthis[1].zip\HijackThis.exe

R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Default_Page_URL = http://yahoo.sbc.com/dsl
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Search Bar = http://rd.yahoo.com/customize/sbcydsl/defa.../search/ie.html
F2 - REG:system.ini: Shell=Explorer.exe C:\WINDOWS\System32\printer.exe
O3 - Toolbar: &Radio - {8E718888-423F-11D2-876E-00A0C9082467} - C:\WINDOWS\System32\msdxm.ocx

Please help me.. im in a hurry.. i need to work on some projects for school, i would like to thank those who help and acknowledge my need!

Sincerely,Alex