When the message first appeared I ran the McAffee Antivirus and it indicated that it cleaned and deleted the virus:
12/14/2008 3:02:11 PM Cleaned C:\WINDOWS\system32\drivers\svchost.exe Generic Downloader.x(Trojan)
12/14/2008 3:13:39 PM Deleted c:\Documents and Settings\LocalService\Local Settings\Temporary Internet Files\Content.IE5\8XANCPEF\Img3.pif W32/Sdbot.worm.gen.bi(Virus)
12/14/2008 3:13:39 PM Deleted c:\Documents and Settings\LocalService\Local Settings\Temporary Internet Files\Content.IE5\GT6J8XMB\out.exe Generic BackDoor.l(Trojan)
This of course did not stop the pop up from continually poping up and now Windows will not allow any installer programs to run (tried installing HijackThis and MalwareBytes Anti-Malware) and any browsers (IE & Netscape) crash immediately after launching. This will occasionally cause Windows to completely freeze.
I'm out of ideas and would apprciate any help.