Just before this started happening I had run a virus scan and detected (and deleted) r.exe - not sure if it's part of the cause of this.
I can boot in safe mode but I can't use explorer to search around my machine or I get the same problem there. I can use AVG antivirus, which I've done. I can use regedit which I have to clean up the remnants of spyware I can find. I can boot to the command line to handle file deletions and the like. But every time I try to boot up normally, I continue to get the same problem.