I know 100% this has to be due to a virus, my problem is this is a nasty virus. The only anti virus I have is Spy Bot Search and Destroy, I've tried downloading other anti viruses two of which have actually given me viruses (One of which I can't get rid of). For about 3 to 4 months now I've been getting "Window Security Alert" messages that state "Warning! Potential Spyware Operation! Your computer is making unauthorized copies of your system and Internet files. Run full scan now to prevent any unathorised(Yes thats how its spelled in the message) access to your files! Click YES to download spyware remover ..." After seeing this I attempted to go to add/remove programs to see if I can fix the problem. I in turn got "This operation has been canceled due to restrictions in effect on this computer. Please contact your system administrator" the problem there is I am the system administrator. Shorty after this I tried to do a system restore/format only to find that my restore option has been compromised and I now get "System failure" blue screen when hitting f8 to load it.

Dear DesMephisto :
Spy Bot Search and Destroy is not anti-virus system. Its only anti-spy ware
so you will need to download anti-virus system
Do those steps:
1- go to this link :
http://www.kaspersky.com/internet_s...
Then download Kaspersky Internet Security 7.0
The trial download is a fully functional version of the product, which will run for free for a period 30 days.
2-active the Kaspersky by the internet
3- scan your PC for Viruses

Duo to the problem description i guess there is a spy behavior
So go to
http://free.grisoft.com/doc/5390/us...
Download AVG anti-spy it's totally free
Scan your PC again with AVG

GOOD LUCK

Allam Rahmeh
Latakia Syria

Please download and install the latest version of HijackThis v2.0.2:

Download the "HijackThis" Installer from this link:
Hijack This

1. Save " HJTInstall.exe" to your desktop.
2. Double click on HJTInstall.exe to run the program.
3. By default it will install to C:\Program Files\Trend Micro\HijackThis.
4. Accept the license agreement by clicking the "I Accept" button.
5.Click on the "Do a system scan and save a log file" button. It will scan and then ask you to save the log.
6. Click "Save log" to save the log file and then the log will open in Notepad.
7. Click on "Edit > Select All" then click on "Edit > Copy" to copy the entire contents of the log.
8. Paste the log in your next reply.
9. Do NOT have HijackThis fix anything yet! Most of what it finds will be harmless or even required.

First off, thanks for the help guys. I really appreciate it.

I've actually downloaded AVG the other day, but I can't actually get it to install, it fails at 90% (Again I think this is due to the virus, maybe not, but considering I can't install other applications either it leads me to this conclusion) Never mind they both wont work due to Norton Anti Virus which I can't remove due to the restriction on the add/remove programs.

As for Hijack this. I've already spotted the SVShost virus, but thats about all I've noticed so far.

Logfile of Trend Micro HijackThis v2.0.2
Scan saved at 11:51:27 AM, on 2/16/2008
Platform: Windows XP SP2 (WinNT 5.01.2600)
MSIE: Internet Explorer v6.00 SP2 (6.00.2900.2180)
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\Ati2evxx.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\Ati2evxx.exe
c:\Program Files\Common Files\Symantec Shared\ccProxy.exe
c:\Program Files\Common Files\Symantec Shared\ccSetMgr.exe
C:\WINDOWS\Explorer.exe
C:\WINDOWS\system32\spoolsv.exe
C:\PROGRA~1\COMMON~1\AOL\ACS\AOLacsd.exe
C:\Program Files\Common Files\Microsoft Shared\VS7DEBUG\MDM.EXE
C:\WINDOWS\system32\svshost.exe
C:\WINDOWS\wanmpsvc.exe
c:\Program Files\Common Files\Symantec Shared\Security Center\SymWSC.exe
C:\WINDOWS\shell.exe
C:\Program Files\Java\jre1.6.0_03\bin\jusched.exe
C:\windows\system\hpsysdrv.exe
C:\HP\KBD\KBD.EXE
C:\Program Files\Common Files\Real\Update_OB\realsched.exe
C:\Program Files\iTunes\iTunesHelper.exe
C:\Program Files\iPod\bin\iPodService.exe
C:\Program Files\ATI Technologies\ATI Control Panel\atiptaxx.exe
C:\WINDOWS\ALCXMNTR.EXE
C:\Program Files\Common Files\AOL\ACS\AOLDial.exe
C:\Program Files\Common Files\AOL\1192047181\ee\AOLSoftware.exe
C:\WINDOWS\PCHealth\HelpCtr\Binaries\MSConfig.exe
C:\WINDOWS\system32\Rundll32.exe
C:\WINDOWS\system32\ctfmon.exe
C:\Program Files\America Online 9.0b\aoltray.exe
C:\Program Files\Compaq Connections\6750491\Program\Compaq Connections.exe
C:\Documents and Settings\Compaq_Owner\Start Menu\Programs\Startup\system.exe
c:\program files\common files\aol\1192047181\ee\aolsoftware.exe
C:\Program Files\Common Files\Symantec Shared\SNDSrvc.exe
C:\Program Files\America Online 9.0b\waol.exe
C:\Program Files\America Online 9.0b\shellmon.exe
C:\Program Files\Common Files\Aol\aoltpspd.exe
C:\Program Files\Ares\Ares.exe
C:\Program Files\Mozilla Firefox\firefox.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Documents and Settings\Compaq_Owner\Desktop\HiJackThis.exe

R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Default_Page_URL = http://ie.redirect.hp.com/svs/rdr?T...
R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Default_Search_URL = http://ie.redirect.hp.com/svs/rdr?T...
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Default_Page_URL = http://ie.redirect.hp.com/svs/rdr?T...
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Search Bar = http://ie.redirect.hp.com/svs/rdr?T...
F2 - REG:system.ini: Shell=Explorer.exe C:\WINDOWS\shell.exe
F2 - REG:system.ini: UserInit=C:\WINDOWS\system32\Userinit.exe
O3 - Toolbar: Norton AntiVirus - {42CDD1BF-3FFB-4238-8AD1-7859DF00B1D6} - c:\Program Files\Norton AntiVirus\NavShExt.dll
O4 - HKLM\..\Run: [SunJavaUpdateSched] "C:\Program Files\Java\jre1.6.0_03\bin\jusched.exe"
O4 - HKLM\..\Run: [hpsysdrv] c:\windows\system\hpsysdrv.exe
O4 - HKLM\..\Run: [KBD] C:\HP\KBD\KBD.EXE
O4 - HKLM\..\Run: [TkBellExe] "C:\Program Files\Common Files\Real\Update_OB\realsched.exe" -osboot
O4 - HKLM\..\Run: [iTunesHelper] C:\Program Files\iTunes\iTunesHelper.exe
O4 - HKLM\..\Run: [Recguard] C:\WINDOWS\SMINST\RECGUARD.EXE
O4 - HKLM\..\Run: [VTTimer] VTTimer.exe
O4 - HKLM\..\Run: [ccApp] "C:\Program Files\Common Files\Symantec Shared\ccApp.exe"
O4 - HKLM\..\Run: [NAV CfgWiz] c:\Program Files\Common Files\Symantec Shared\CfgWiz.exe /GUID NAV /CMDLINE "REBOOT"
O4 - HKLM\..\Run: [IS CfgWiz] c:\Program Files\Common Files\Symantec Shared\cfgwiz.exe /GUID NIS /CMDLINE "REBOOT"
O4 - HKLM\..\Run: [SSC_UserPrompt] c:\Program Files\Common Files\Symantec Shared\Security Center\UsrPrmpt.exe
O4 - HKLM\..\Run: [PS2] C:\WINDOWS\system32\ps2.exe
O4 - HKLM\..\Run: [ATIPTA] C:\Program Files\ATI Technologies\ATI Control Panel\atiptaxx.exe
O4 - HKLM\..\Run: [AlcxMonitor] ALCXMNTR.EXE
O4 - HKLM\..\Run: [Printer] C:\WINDOWS\system32\printer.exe
O4 - HKLM\..\Run: [AOLDialer] C:\Program Files\Common Files\AOL\ACS\AOLDial.exe
O4 - HKLM\..\Run: [Pure Networks Port Magic] "C:\PROGRA~1\PURENE~1\PORTMA~1\PortAOL.exe" -Run
O4 - HKLM\..\Run: [HostManager] C:\Program Files\Common Files\AOL\1192047181\ee\AOLSoftware.exe
O4 - HKLM\..\Run: [AOLAspSunset2] C:\Documents and Settings\All Users\Application Data\AOL\UserProfiles\All Users\antiSpyware\dat\updates\aspapp\sunsetAsp2.exe
O4 - HKLM\..\Run: [webscan] "C:\Program Files\Acceleration Software\Anti-Virus\stopsignav.exe" -k
O4 - HKLM\..\Run: [MSConfig] C:\WINDOWS\PCHealth\HelpCtr\Binaries\MSConfig.exe /auto
O4 - HKLM\..\Run: [BM7373aad2] Rundll32.exe "C:\WINDOWS\system32\ckvwsqis.dll",s
O4 - HKCU\..\Run: [ctfmon.exe] C:\WINDOWS\system32\ctfmon.exe
O4 - HKCU\..\Run: [Uniblue SpyEraser] "C:\Program Files\Uniblue\SpyEraser\SpyEraser.exe" -m
O4 - HKCU\..\Run: [Spoolsv] C:\WINDOWS\system32\spoolvs.exe
O4 - HKCU\..\Run: [ares] "C:\Program Files\Ares\Ares.exe" -h
O4 - Startup: Adobe Gamma.lnk = C:\Program Files\Common Files\Adobe\Calibration\Adobe Gamma Loader.exe
O4 - Startup: findfast.exe
O4 - Startup: system.exe
O4 - Global Startup: America Online 9.0 Tray Icon.lnk = C:\Program Files\America Online 9.0b\aoltray.exe
O4 - Global Startup: autorun.exe
O4 - Global Startup: Compaq Connections.lnk = C:\Program Files\Compaq Connections\6750491\Program\Compaq Connections.exe
O7 - HKLM\Software\Microsoft\Windows\CurrentVersion\Policies\System, DisableRegedit=1
O8 - Extra context menu item: E&xport to Microsoft Excel - res://C:\PROGRA~1\MI1933~1\OFFICE11\EXCEL.EXE/3000
O9 - Extra button: (no name) - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_03\bin\ssv.dll
O9 - Extra 'Tools' menuitem: Sun Java Console - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_03\bin\ssv.dll
O9 - Extra button: Research - {92780B25-18CC-41C8-B9BE-3C9C571A8263} - C:\PROGRA~1\MI1933~1\OFFICE11\REFIEBAR.DLL
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
O17 - HKLM\System\CCS\Services\Tcpip\..\{01F441A9-BEA7-4513-A52E-8934A6B839EF}: NameServer = 205.188.146.145
O17 - HKLM\System\CS1\Services\Tcpip\..\{01F441A9-BEA7-4513-A52E-8934A6B839EF}: NameServer = 205.188.146.145
O23 - Service: AOL Connectivity Service (AOL ACS) - America Online, Inc. - C:\PROGRA~1\COMMON~1\AOL\ACS\AOLacsd.exe
O23 - Service: Ares Chatroom server (AresChatServer) - Ares Development Group - C:\Program Files\Ares\chatServer.exe
O23 - Service: Ati HotKey Poller - Unknown owner - C:\WINDOWS\system32\Ati2evxx.exe
O23 - Service: Symantec Event Manager (ccEvtMgr) - Symantec Corporation - c:\Program Files\Common Files\Symantec Shared\ccEvtMgr.exe
O23 - Service: Symantec Network Proxy (ccProxy) - Symantec Corporation - c:\Program Files\Common Files\Symantec Shared\ccProxy.exe
O23 - Service: Symantec Password Validation (ccPwdSvc) - Symantec Corporation - c:\Program Files\Common Files\Symantec Shared\ccPwdSvc.exe
O23 - Service: Symantec Settings Manager (ccSetMgr) - Symantec Corporation - c:\Program Files\Common Files\Symantec Shared\ccSetMgr.exe
O23 - Service: iPod Service (iPodService) - Apple Computer, Inc. - C:\Program Files\iPod\bin\iPodService.exe
O23 - Service: Norton AntiVirus Auto Protect Service (navapsvc) - Symantec Corporation - c:\Program Files\Norton AntiVirus\navapsvc.exe
O23 - Service: SAVScan - Symantec Corporation - c:\Program Files\Norton AntiVirus\SAVScan.exe
O23 - Service: Security Restore Services - Unknown owner - C:\WINDOWS\system32\svshost.exe
O23 - Service: Symantec Network Drivers Service (SNDSrvc) - Symantec Corporation - C:\Program Files\Common Files\Symantec Shared\SNDSrvc.exe
O23 - Service: SymWMI Service (SymWSC) - Symantec Corporation - c:\Program Files\Common Files\Symantec Shared\Security Center\SymWSC.exe
O23 - Service: WAN Miniport (ATW) Service (WANMiniportService) - America Online, Inc. - C:\WINDOWS\wanmpsvc.exe

--
End of file - 8376 bytes

Please download ComboFix to the desktop from one of the following links:

Link1

Link 2

Link 3

Double-click combofix.exe
Follow the prompts.
(Don't click on the window while the program is running, it may cause your system to hang.)
Please post the log it produces.