After I used my anti-virus to get rid of a trojan I was still having some problems so I ran System Restore. After the restoration I noticed that I had extra files and icons on my hard drive but they are very faint and when I hilight them they are described as Hidden Files. I don't know if this has anything to do with my problems but System Restore will no longer work. When I try to use the program it goes through the regular actions and appears normal but after running and re-booting it says that it was unable to complete the restoration.

Now when I start up my pc a black window opens titled 16 Bit MS-DOS Subsystem over which a regular window opens titled C:\Windows\system 32\maxd1.exe and contains the following message: "The NTVDM CPU has encountered and illegal instruction. CS: 0df7 IP: 0125 OP: 62 f5 88 1 bae. Choose close to terminate the application." When I use the close button a window opens titled RUNTIME ERROR and says "Invalid Backweb application on ID 13708". When I click OK a window titled SCAN opens that says: "The feature you are trying to use is on a CD-Rom or other removable disc that's not available. Insert the SCAN disc and click OK." (As far as I can determine Windows Installer is trying to install something and can't find it). When I click Cancel on this window still another window opens titled SCAN ERROR 1706 and says: "No valid source could be found for product scan. The Windows Installer cannot continue". When I click Ok this SCAN window for Windows Installer re-opens and keeps trying to scan for whatever it is looking for and WILL NOT GO AWAY. I cannot even shut down my pc the normal way and when I try to use CONTROL-ALT-DELETE a window opens saying "Task Manager has been disabled by your administrator." The only way I can shut down is by using the power button. On top of all this my pc keeps telling me that I have a virus or spyware but both my anti-virus and Spybot Search and Destroy come up with nothing. Can somebody please help me out here?

Yeah, heard this story before. System restore should be relabeled as "self destruct" feature.

The problem with system restore is that it does not do a COMPLETE restoration. There are certain system folders which are not monitored and therefore not restored. What I fail to understand is how Microsoft can believe that restoring only half a computer can be denoted SYSTEM RESTORE.

Try loading LAST KNOWN GOOD configuration and see if that works.

...And stop wasting disk space...turn restore off and get a REAL third party restore/backup program.

Try this free scan On-line Spyware Scan
remove the problems

I use it alot when otherspyware problems don't pick up things.

What AV are you using?
Maybe try an on-line scan at: RAV on-line Scan Anti-virus

Hopefully my advice will help you...Please post back with your results....thanks