No internet connection b/c of run dll virus

I have tried avg, spybot, regcure, and malwarebytes to try to solve the problem. I can access the control panel but when i tried to access the add/remove program i get a run dll error. I get all types of errors that include operating system errors and many others. I am not sure if this has caused my system to not pick up the internet as well because when i connect it to the laptop it run fine. What else can i do other than reinstall windows?

Lets see if we can get anything running first.

Please download the current version of HijackThis from HERE

• Double click and run the installer.
  
• It will install to C:\Program Files\Trend Micro\HijackThis\hijackthis.exe
  
• After installing, you should get the user agreement, press accept and Hijack This will run.
  
• Select Do a system scan and save a log file. This will open a notepad file of everything Hijack This found, copy and paste it back here.
  

Here are the results that I got. HELP

Logfile of Trend Micro HijackThis v2.0.2
Scan saved at 8:43:12 PM, on 3/4/2009
Platform: Windows XP SP3 (WinNT 5.01.2600)
MSIE: Internet Explorer v7.00 (7.00.6000.16762)
Boot mode: Normal

Running processes:
C:\WINDOWS\System32\smss.exe
C:\WINDOWS\system32\winlogon.exe
C:\WINDOWS\system32\services.exe
C:\WINDOWS\system32\lsass.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\Program Files\Common Files\Microsoft Shared\VS7DEBUG\MDM.EXE
C:\WINDOWS\system32\svchost.exe
C:\Program Files\NTRU Cryptosystems\NTRU Hybrid TSS v1.05\bin\tcsd_win32.exe
C:\WINDOWS\Explorer.EXE
C:\WINDOWS\System32\reader_s.exe
C:\WINDOWS\system32\ctfmon.exe
C:\Program Files\Windows Media Player\WMPNSCFG.exe
C:\DOCUME~1\Teacher.VCS\LOCALS~1\Temp\csrssc.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\wuauclt.exe
C:\WINDOWS\system32\wuauclt.exe
G:\hijackgpthis.exe

R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Search Bar = http://www.yahoo.com/search/ie.html
R0 - HKCU\Software\Microsoft\Internet Explorer\Main,Start Page = http://www.yahoo.com/
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Default_Page_URL = http://go.microsoft.com/fwlink/?LinkId=69157
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Default_Search_URL = http://go.microsoft.com/fwlink/?LinkId=54896
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Search Page = http://go.microsoft.com/fwlink/?LinkId=54896
R0 - HKLM\Software\Microsoft\Internet Explorer\Main,Start Page = http://go.microsoft.com/fwlink/?LinkId=69157
R0 - HKCU\Software\Microsoft\Internet Explorer\Main,Local Page =
R0 - HKLM\Software\Microsoft\Internet Explorer\Main,Local Page =
F2 - REG:system.ini: UserInit=C:\WINDOWS\system32\userinit.exe
O2 - BHO: SSVHelper Class - {761497BB-D6F0-462C-B6EB-D4DAF1D92D43} - C:\Program Files\Java\jre1.6.0_07\bin\ssv.dll
O2 - BHO: Google Toolbar Helper - {AA58ED58-01DD-4d91-8333-CF10577473F7} - c:\program files\google\googletoolbar2.dll
O4 - HKLM\..\Run: [reader_s] C:\WINDOWS\System32\reader_s.exe
O4 - HKCU\..\Run: [ctfmon.exe] C:\WINDOWS\system32\ctfmon.exe
O4 - HKCU\..\Run: [WMPNSCFG] C:\Program Files\Windows Media Player\WMPNSCFG.exe
O4 - HKCU\..\Run: [MS AntiSpyware 2009] "C:\Documents and Settings\All Users\Application Data\CrucialSoft Ltd\MS AntiSpyware 2009\msas2009.exe" /autorun
O4 - HKCU\..\Run: [tezrtsjhfr84iusjfo84f] C:\DOCUME~1\Teacher.VCS\LOCALS~1\Temp\csrssc.exe
O4 - HKCU\..\Run: [reader_s] C:\Documents and Settings\Teacher.VCS\reader_s.exe
O4 - HKUS\S-1-5-18\..\Run: [reader_s] C:\WINDOWS\system32\config\systemprofile\reader_s.exe (User 'SYSTEM')
O4 - HKUS\.DEFAULT\..\Run: [reader_s] C:\WINDOWS\system32\config\systemprofile\reader_s.exe (User 'Default user')
O7 - HKCU\Software\Microsoft\Windows\CurrentVersion\Policies\System, DisableRegedit=1
O8 - Extra context menu item: E&xport to Microsoft Excel - res://C:\PROGRA~1\MICROS~2\OFFICE11\EXCEL.EXE/3000
O9 - Extra button: (no name) - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_07\bin\ssv.dll
O9 - Extra 'Tools' menuitem: Sun Java Console - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_07\bin\ssv.dll
O9 - Extra button: Research - {92780B25-18CC-41C8-B9BE-3C9C571A8263} - D:\PROGRA~1\MICROS~1\OFFICE11\REFIEBAR.DLL
O9 - Extra button: (no name) - {DFB852A3-47F8-48C4-A200-58CAB36FD2A2} - C:\WINDOWS\system32\shdocvw.dll
O9 - Extra 'Tools' menuitem: Spybot - Search && Destroy Configuration - {DFB852A3-47F8-48C4-A200-58CAB36FD2A2} - C:\WINDOWS\system32\shdocvw.dll
O9 - Extra button: (no name) - {e2e2dd38-d088-4134-82b7-f2ba38496583} - C:\WINDOWS\Network Diagnostic\xpnetdiag.exe
O9 - Extra 'Tools' menuitem: @xpsp3res.dll,-20001 - {e2e2dd38-d088-4134-82b7-f2ba38496583} - C:\WINDOWS\Network Diagnostic\xpnetdiag.exe
O9 - Extra button: Messenger - {FB5F1910-F110-11d2-BB9E-00C04F795683} - C:\Program Files\Messenger\msmsgs.exe
O9 - Extra 'Tools' menuitem: Windows Messenger - {FB5F1910-F110-11d2-BB9E-00C04F795683} - C:\Program Files\Messenger\msmsgs.exe
O16 - DPF: {17492023-C23A-453E-A040-C7C580BBF700} (Windows Genuine Advantage Validation Tool) - http://go.microsoft.com/fwlink/?linkid=39204
O16 - DPF: {406B5949-7190-4245-91A9-30A17DE16AD0} (Snapfish Activia) - http://photos.walmart.com/WalmartActivia.cab
O16 - DPF: {6E32070A-766D-4EE6-879C-DC1FA91D2FC3} (MUWebControl Class) - http://update.microsoft.com/microsoftupdate/v6/V5Controls/en/x86/client/muweb_site.cab?1140729734140
O16 - DPF: {B8BE5E93-A60C-4D26-A2DC-220313175592} (MSN Games - Installer) - http://cdn2.zone.msn.com/binFramework/v10/ZIntro.cab56649.cab
O16 - DPF: {D27CDB6E-AE6D-11CF-96B8-444553540000} (Shockwave Flash Object) - http://fpdownload2.macromedia.com/get/shockwave/cabs/flash/swflash.cab
O18 - Protocol: linkscanner - {F274614C-63F8-47D5-A4D1-FBDDE494F8D1} - (no file)
O20 - Winlogon Notify: avgrsstarter - avgrsstx.dll (file missing)
O23 - Service: DataSvr - Wave Systems Corp. - C:\Program Files\Wave Systems Corp\Common\DataServer.exe
O23 - Service: Google Updater Service (gusvc) - Google - C:\Program Files\Google\Common\Google Updater\GoogleUpdaterService.exe
O23 - Service: Pml Driver HPZ12 - HP - C:\WINDOWS\system32\HPZipm12.exe
O23 - Service: NTRU Hybrid TSS v1.05 TCSD (tcsd_win32.exe) - Unknown owner - C:\Program Files\NTRU Cryptosystems\NTRU Hybrid TSS v1.05\bin\tcsd_win32.exe

--
End of file - 5418 bytes

Hello.
Bad news.

Your system is severly infected. Problem with these infections nowadays is, it causes a lot of damage. Even if we clean the malware off your system, I can't guarantee that your system will be clean afterwards, because these infections/bundles leave a lot of leftovers behind that most scanners won't even recognise and logs won't show.
Also, I can't promise you we can repair all the damage it caused... Even after cleaning the malware, you can still get errors afterwards because of the damage. Solving these is not always possible since it will be searching for a needle in a haystack to find the right cause and solution.
So, we can try to clean this up and do what we can, but keep in mind that we can't solve ALL problems this malware already caused.

In light of this it would be wise for you to back up any files and folders that you don't want to lose before we start. Reason I am telling this is because when a system is so terribly infected and we try to clean this up manually, the damage that is already present may interfere with our removal attempts.

Actually, this doesn't suprise me at all...
I notice that you never scanned with an Antivirus previously before starting this thread - because you don't even have an Antivirus installed!
This is somewhat suicidal in today's digital world.

You have an infection known as Virut. Virut is a file infector, infecting EVERY exe/scr/php/asp/htm/html files, Virut CANNOT be fixed.
Read here:
http://miekiemoes.blogspot.com/2009/02/virut-and-other-file-infectors-throwing.html

DO NOT backup any exe/scr/php/asp/htm/html files otherwise you will be backing up the infection.

Your computer has multiple infections, including a backdoor. A backdoor gives intruders complete control of your computer, logs your keystrokes, steal personal information, etc.

You are strongly advised to do the following:

• Disconnect the computer from the Internet and from any networked computers until it is cleaned.
  
• Back up all your important data except programs. The programs can be reinstalled back from the original disc or from the Net.
  
• Call all your banks, financial institutions, credit card companies and inform them that you may be a victim of identity theft and put a watch on your accounts. If you don't mind the hassle, change all your account numbers.
  
• From a clean computer, change all your passwords (ISP login password, your email address(es) passwords, financial accounts, PayPal, eBay, Amazon, online groups and forums and any other online activities you carry out which require a username and password).
  

Do NOT change your passwords from this computer as the attacker will be able to get all the new passwords and transaction records.

Due to its backdoor functionality, your computer is very likely to have been compromised and there is no way that it can be trusted again. Many experts in the security community believe that once infected with this type of Trojan, the best course of action would be to do a reformat and reinstallation of the operating system (OS). However, if you do not have the resources to reinstall your OS and would like me to attempt to clean your machine, I will be happy to do so.

To help you understand more, please take some time to read the following articles:

What are Remote Access Trojans and why are they dangerous
How do I respond to a possible identity theft and how do I prevent it
When should I do a reformat and reinstallation of my OS
Where to backup your files
How to backup your files in Windows XP
Restoring your backups