|Sandi, you have a number of issues here.|
What do you think about reloading the OS from scratch and then applying service pack updates and a good security suite and trying it again.
Be sure you make a good backup of your important data. Check it with a virus scanner before you return it to system.
By the way the hosts file to help prevent malware is a good start but it has to be there before issues. See http://winhelp2002.mvps.org/hosts.htm for ways to move it in Vista.
Personally I open cmd with admin and then copy files.
1/3 of highway deaths are caused by drunks. The rest are by people who can't drive any better than a drunk.