fake anti virus attack

Help!
My husbands computer has been attacked by one of those fake antivirus things. It will not allow us to run AVG 9 and will not allow malwarebytes which was previously installed to run. I tried to run Malware from a disc but it blocked that too. It wont allow Hijack this to run from a disc and wont allow access to the internet. The computer therefore is totally blocked apart from off line stuff. It wants us (obviously!) to run its own anti virus software called Security Suite. I cant seem to find another name for it. ( icon -Yellow shield with two diagonal lines through it). I am contacting you via my computer - what do we do?? Can you help us? He uses Vista.
Thanks

Hello.

Download OTL by OldTimer to your Desktop.

• Close all windows and double click OTL.exe
  
• Click Run Scan and let the program run uninterrupted
  
• It will produce two logs for you, one will pop up - OTL.txt, the other will be saved on your Desktop - Extras.txt. Post both logs in this thread.
  
• You may need to use two posts to get it all.
  

That didnt work unfortunately. Downloaded OTL onto a disc for hubbies machine which as soon as I turned it on went into a spiral loop of threat messages and seemingly trying to reconnect to the net only to get more threat messages. Once I worked my way through all those I tried to run OTL from the disc but was immediately blocked with the message OTL.exe is infected.
AVG 9 seems to be scanning now and I am getting a stream of files infected with Trojan Horse generic 19.MTO. However it cannot remove the files as I get a message saying googletoolbaruser_32.exe is infected.
Virus is also causing machine to connect to porn sites and I am getting messages about Win32/Nuqel.E trying to infect.

What do we do now?

Computer sorted itself out!!
I have no idea why but AVG suddenly started to delete the infected files and restarted. I quickly ran Malware Bytes which showed up three infections - two adware and one further register key Trojan Horse as previously which it then deleted. Connection to the internet was corrupted so I did system restore to 4 days ago and now the computer is working normally. Phew!!
Was this a virus which suddenly self destructs or what??
Fingers crosed that things remain OK. Anything else I should do?

No idea how that works, ah well, please run OTL anyway, I wanna make sure nothing is left.