The regfix you ran from my first post should have restored your desktop, it's designed to do exactly that. The blue screen is an earmark of the smitfraud infection. I suggest we try the regfix again to try to get some semblance of control of your computer, now that you have a working explorer.exe. If it works, we can continue from there.
Please run smitfraud.reg any way you can, and let me know if you encounter problems, we'll work around them.
By the way, C:\!submit\wp.exe is not part of your problem, it's created to allow easy submission of malware files to the experts that figure out how to fix these problems. Note that wp.exe is one of the files we tried to killbox.