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Virus Alert besides system clock, HJT log incl.

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I chanced upon this forum while doing some google searches for the "Virus Alert in System Clock" problem. Not surprisingly, seems like quite a few people have been affected in the past 2 months by the same issue. Having read a few similar resolved issues through this forum, I have decided to ask this forum's experts for their help.

I managed to get affected on Wednesday evening and I knew I had to format the laptop (Toshiba S2450-101) to resolve the issue. However, when I put the product recovery cd into my drive and re-booted, it seemed as if the virus had overridden the cd-rom boot setup! So all it does with the product recovery cd in the drive is to load windows normally with the virus still intact.

Other issues include -

1) Cannot access My Computer directly. Can access explorer from the run box. However, cannot see my hard drives (both internal and external).
2) Ctrl+Alt+Del does not work. Gives me the error "This function has been disabled by the administrator". I am the admin.
3) Cannot surf the web properly. Can only access the web through IE (which I never use). IE has some random spyware/antivirus toolbar installed. Cannot access webpages. Re-directs me to PCServe or other random webpages which are never requested. So pretty much cannot access the web. Firefox does not respond when double-clicked.
4) Some antivirus software has installed itself automatically. It's very originally called Antivirus Software and runs an automatic scan at start up. I managed to disable this through msconfig.
5) My start menu has changed dramatically.
6) My desktop has a new blue background which states "Spyware/Malware detected etc."

To summarise, it's a mess and I cannot format the laptop. The only other solution I could think of was to remove my hard-drive and fix it to an external hard-drive module and connect it through usb to another pc/laptop. This would allow me to format the c: drive as then the Windows would not be loaded.

I have attached the required HijackThis logs below. Also, I have tried to install Malwarebytes' on the infected laptop but to no avail - double-clicking on it does not make it respond.

Please let me know what would be required to get rid of this issue completely. I am willing to cooperate fully until I see the end of this frustrating issue. Probably going to work on it all weekend. Also, I have access to another laptop which is functioning well and I can use my flash disk to transfer files if needs be.

Many thanks for your valuable time and input.

Much appreciated.

HijackThis log -

Logfile of Trend Micro HijackThis v2.0.2
Scan saved at 18:34: VIRUS ALERT!, on 04/07/2008
Platform: Windows XP SP2 (WinNT 5.01.2600)
MSIE: Internet Explorer v7.00 (7.00.6000.16674)
Boot mode: Normal

Running processes:
C:\Program Files\Kaspersky Lab\Kaspersky Internet Security 6.0\avp.exe
C:\Program Files\Network Monitor\netmon.exe
C:\Program Files\Analog Devices\SoundMAX\PmProxy.exe
C:\Program Files\Analog Devices\SoundMAX\SMAgent.exe
C:\Program Files\TOSHIBA\TME3\Tmesbs32.exe
C:\Program Files\Viewpoint\Common\ViewpointService.exe
C:\Program Files\TOSHIBA\TOSHIBA Controls\TFncKy.exe
C:\Program Files\TOSHIBA\Wireless Hotkey\TosHKCW.exe
C:\Program Files\Synaptics\SynTP\SynTPLpr.exe
C:\Program Files\Synaptics\SynTP\SynTPEnh.exe
C:\Program Files\TOSHIBA\TouchED\TouchED.Exe
C:\Program Files\Toshiba\ConfigFree\NDSTray.exe
C:\Program Files\Belkin\F5D9010\Belkinwcui.exe
C:\Program Files\Kaspersky Lab\Kaspersky Internet Security 6.0\avp.exe
C:\Program Files\Common Files\Ahead\Lib\NMBgMonitor.exe
C:\Program Files\Nokia\Nokia PC Suite 6\PcSync2.exe
C:\Program Files\Hewlett-Packard\Digital Imaging\bin\hpohmr08.exe
C:\Program Files\Hewlett-Packard\Digital Imaging\bin\hpotdd01.exe
C:\Program Files\Common Files\Ahead\Lib\NMIndexingService.exe
C:\Program Files\Hewlett-Packard\Digital Imaging\bin\hpoevm08.exe
C:\Program Files\Common Files\PCSuite\Services\ServiceLayer.exe
C:\Program Files\Common Files\Ahead\Lib\NMIndexStoreSvr.exe
C:\Documents and Settings\Rohit\Desktop\HiJackThis.exe

R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Default_Page_URL = http://www.sky.com
R0 - HKCU\Software\Microsoft\Internet Explorer\Main,Start Page = http://softwarerefer...=...6Ojg5&lid=2
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Default_Page_URL = http://go.microsoft....k/?LinkId=69157
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Default_Search_URL = http://go.microsoft....k/?LinkId=54896
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Search Page = http://go.microsoft....k/?LinkId=54896
R0 - HKLM\Software\Microsoft\Internet Explorer\Main,Start Page = http://go.microsoft....k/?LinkId=69157
R1 - HKCU\Software\Microsoft\Internet Explorer\Main,First Home Page = http://www.sky.com
R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Window Title = Windows Internet Explorer provided by Sky Broadband
O3 - Toolbar: nqgpedlr - {EC4A1CF6-AE63-45C3-B7C7-E427DA6CBFD9} - C:\WINDOWS\nqgpedlr.dll
O4 - HKLM\..\Run: [PmProxy] C:\Program Files\Analog Devices\SoundMAX\PmProxy.exe
O4 - HKLM\..\Run: [00THotkey] C:\WINDOWS\System32\00THotkey.exe
O4 - HKLM\..\Run: [000StTHK] 000StTHK.exe
O4 - HKLM\..\Run: [Tpwrtray] TPWRTRAY.EXE
O4 - HKLM\..\Run: [TMESBS.EXE] C:\Program Files\TOSHIBA\TME3\TMESBS32.EXE /Client
O4 - HKLM\..\Run: [TFncKy] TFncKy.exe /Type 28
O4 - HKLM\..\Run: [TFNF5] TFNF5.exe
O4 - HKLM\..\Run: [TosHKCW.exe] "C:\Program Files\TOSHIBA\Wireless Hotkey\TosHKCW.exe"
O4 - HKLM\..\Run: [SynTPLpr] C:\Program Files\Synaptics\SynTP\SynTPLpr.exe
O4 - HKLM\..\Run: [SynTPEnh] C:\Program Files\Synaptics\SynTP\SynTPEnh.exe
O4 - HKLM\..\Run: [TouchED] C:\Program Files\TOSHIBA\TouchED\TouchED.Exe
O4 - HKLM\..\Run: [NDSTray.exe] "C:\Program Files\Toshiba\ConfigFree\NDSTray.exe"
O4 - HKLM\..\Run: [F5D9010] C:\Program Files\Belkin\F5D9010\Belkinwcui.exe
O4 - HKLM\..\Run: [AVP] "C:\Program Files\Kaspersky Lab\Kaspersky Internet Security 6.0\avp.exe"
O4 - HKCU\..\Run: [BgMonitor_{79662E04-7C6C-4d9f-84C7-88D8A56B10AA}] "C:\Program Files\Common Files\Ahead\Lib\NMBgMonitor.exe"
O4 - HKCU\..\Run: [PcSync] C:\Program Files\Nokia\Nokia PC Suite 6\PcSync2.exe /NoDialog
O4 - HKCU\..\Run: [ctfmon.exe] C:\WINDOWS\system32\ctfmon.exe
O4 - HKUS\S-1-5-18\..\Run: [CTFMON.EXE] C:\WINDOWS\System32\CTFMON.EXE (User 'SYSTEM')
O4 - HKUS\.DEFAULT\..\Run: [CTFMON.EXE] C:\WINDOWS\System32\CTFMON.EXE (User 'Default user')
O4 - Startup: Deewoo.lnk = ?
O4 - Global Startup: hp psc 1000 series.lnk = ?
O4 - Global Startup: hpoddt01.exe.lnk = ?
O6 - HKCU\Software\Policies\Microsoft\Internet Explorer\Restrictions present
O7 - HKCU\Software\Microsoft\Windows\CurrentVersion\Policies\System, DisableRegedit=1
O8 - Extra context menu item: Add to Anti-Banner - C:\Program Files\Kaspersky Lab\Kaspersky Internet Security 6.0\ie_banner_deny.htm
O8 - Extra context menu item: E&xport to Microsoft Excel - res://C:\PROGRA~1\MICROS~2\OFFICE11\EXCEL.EXE/3000
O9 - Extra button: (no name) - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_03\bin\ssv.dll
O9 - Extra 'Tools' menuitem: Sun Java Console - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_03\bin\ssv.dll
O9 - Extra button: Sky - {08E730A4-FB02-45BD-A900-01E4AD8016F6} - http://www.sky.com (file missing)
O9 - Extra button: Web Anti-Virus statistics - {1F460357-8A94-4D71-9CA3-AA4ACF32ED8E} - C:\Program Files\Kaspersky Lab\Kaspersky Internet Security 6.0\scieplugin.dll
O9 - Extra button: Research - {92780B25-18CC-41C8-B9BE-3C9C571A8263} - C:\PROGRA~1\MICROS~2\OFFICE11\REFIEBAR.DLL
O12 - Plugin for .spop: C:\Program Files\Internet Explorer\Plugins\NPDocBox.dll
O16 - DPF: {3EA4FA88-E0BE-419A-A732-9B79B87A6ED0} (CTVUAxCtrl Object) - http://dl.tvunetworks.com/TVUAx.cab
O16 - DPF: {6414512B-B978-451D-A0D8-FCFDF33E833C} (WUWebControl Class) - http://update.micros...b?1180924780902
O16 - DPF: {6E32070A-766D-4EE6-879C-DC1FA91D2FC3} (MUWebControl Class) - http://update.micros...b?1180928555733
O16 - DPF: {E06E2E99-0AA1-11D4-ABA6-0060082AA75C} (GpcContainer Class) - https://7city.webex....bex/ieatgpc.cab
O16 - DPF: {E7DBFB6C-113A-47CF-B278-F5C6AF4DE1BD} - http://download.abac...abasetup163.cab
O18 - Protocol: skype4com - {FFC8B962-9B40-4DFF-9458-1830C7DD7F5D} - C:\PROGRA~1\COMMON~1\Skype\SKYPE4~1.DLL
O21 - SSODL: utilgen - {0ABFA43C-BC12-84C9-2DF2-0B903AAAE614} - C:\Program Files\kjruzoe\utilgen.dll
O23 - Service: Kaspersky Internet Security 6.0 (AVP) - Kaspersky Lab - C:\Program Files\Kaspersky Lab\Kaspersky Internet Security 6.0\avp.exe
O23 - Service: NBService - Nero AG - C:\Program Files\Nero\Nero 7\Nero BackItUp\NBService.exe
O23 - Service: Network Monitor - Unknown owner - C:\Program Files\Network Monitor\netmon.exe
O23 - Service: NMIndexingService - Nero AG - C:\Program Files\Common Files\Ahead\Lib\NMIndexingService.exe
O23 - Service: NVIDIA Driver Helper Service (NVSvc) - NVIDIA Corporation - C:\WINDOWS\System32\nvsvc32.exe
O23 - Service: Pml Driver HPZ12 - HP - C:\WINDOWS\system32\HPZipm12.exe
O23 - Service: ServiceLayer - Nokia. - C:\Program Files\Common Files\PCSuite\Services\ServiceLayer.exe
O23 - Service: SoundMAX Agent Service (SoundMAX Agent Service (default)) - Analog Devices, Inc. - C:\Program Files\Analog Devices\SoundMAX\SMAgent.exe
O23 - Service: Tmesbs32 (Tmesbs) - TOSHIBA Corporation - C:\Program Files\TOSHIBA\TME3\Tmesbs32.exe
O23 - Service: Viewpoint Manager Service - Viewpoint Corporation - C:\Program Files\Viewpoint\Common\ViewpointService.exe
O23 - Service: Windows Live Setup Service (WLSetupSvc) - Unknown owner - C:\Program Files\Windows Live\installer\WLSetupSvc.exe

End of file - 8015 bytes
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