Go to c:\windows\system32\drivers\etc and open up the hosts file (no extensions) up in Notepad. There should be a bunch of lines with a # in front of them followed by a single line like:
If you have anything after that, please post them here.
If you have nothing else besides that line, then:
Turn off system restore by right clicking on My Computer and go to Properties->System Restore and check the box for Turn off System Restore. Click Apply and then OK. Restart your computer and uncheck the same box to enable System Restore.
Your log is clean.
To help prevent future spyware installations/infections, please read the Anti-Spyware Tutorial and use the tools provided.
Are there any problems now? If not, you should be set to go.