I have had the same problem with my computer. AVG kept reporting a "virus" to me - and i kept ignoring it, until one day i just thought, what the hell i'll go and delete it. Instead of deleting it through AVG however, i went straight to the file itself and deleted wininet.dll, not realising it was a vital windows component. Afterwards, obviously, a load of programs on my computer wouldn't work and i got the "application failed to initiate" message. in a panic, i searched on the net for the file and found it on the site mentioned above. downloaded it, and reinstalled, and everything is fine again.
Except MSN messenger. as soon as i got it all sorted, i opened msn and tried to sign in. However when i clicked on the 'sign in' button, it just indented and then nothing happened. I've tried removing MSN and then re-downloading and installing it about five times, and nothing has worked. I've tried a system restore, but for some reason I can't go to any date past October, and even then it's only the 16th (today) that i can access. I am currently using windows messenger, but it's getting really irritating and I want my normal msn back!
Does anyone have any ideas?