I had the same problem for a week. Mine started with a "New Win" Virus that McAfee pick up after opening an e-mail (which was spam. I opened it by mistake when I ment to delete it). It all started from there. It was corrupting everything I was trying to open. My best guess is that it was attached to the Win.ini . After a few minutes I realised that I was only able to open a program once. After that it was killed. McAfee stopped working/opening. IE stopped after 2 times (once opened with the desktop shortcut, second through my favorites shortcut). Then I couldn't install anything or uninstall anything. It was a week of torcher. I tried to get help in the Maleware forum but after struggling for a week on my own and then waiting 4 days on the forum my wife was about to take a hammer to me and then it. They are busy in that forum but rest assured very willing to help and from what I've read they don't give up untill it's all sorted out.
My solution was to reinstall the OS. I had the disk and all the drivers and was able to back up all the files I needed/wanted to dvd. In reguard to that, if that's a choice you are willing to make, don't forget to copy your .pst (e-mail address'), favorites, and documents. I didn't and it's my only regret. Other than that I think it's great. Nothing like having a fresh start.
One downside is having to download all the updates. 2 days at 3 times a day it downloaded up to 22 updates at a time. The first one was 79. But again for me it was worth it. It gave me a chance to back up software programs I wasn't using, and out of the 200+ programs I burned onto dvd I only ended up putting 6 or 7 back. And I always have them if I want them. It runs a whole lot faster in every respect.
However.... I only did it as a last resort. I tried everything i could think of before I 'ran out of time' and slipped the disk in.