First lets deal with the error message you are getting for the msvcrt.dll file by doing the following.
1.Click Start, and then click Run.
2.In the Open box, type Msconfig, and then click OK.
3.In System Configuration Utility, on the General tab, click Extract File.
4.In the Specify the system file you would like to restore box, type Msvcrt.dll, and then click Start.
5.In the Restore from box, browse to the location of your Windows Millennium Edition (Me) CD.
NOTE: If you have an original equipment manufacturer (OEM) installation of Windows Me, the Windows installation files may be stored in the following location:
6.In the Save file in box, type C:\, and then click OK. You receive the following message:
The destination folder
does not exist. Do you want to create it?
Click Yes, and then click OK.
7.Repeat steps 3 through 6, but substitute Msvcirt.dll for Msvcrt.dll.
8.Insert your Windows Me Startup disk, restart the computer, and then select Minimal Boot on the Microsoft Windows Millennium Startup Menu that appears.
9.At the command prompt, type Rename C:\Windows\System\Msvcrt.dll Msvcrt.old, and then press ENTER.
10.Type Rename C:\Windows\System\Msvcirt.dll Msvcirt.old, and then press ENTER.
11.Type Copy C:\Msvcrt.dll C:\Windows\System, and then press ENTER.
12.Type Copy C:\Msvcirt.dll C:\Windows\System, and then press ENTER.
13.Remove the Windows Me Startup disk, and then restart the computer.
After this is complete please post a fresh hijack this log and then we will work from there.