Thank you for explaining the cd linux variant - just never did it before, so my comfort level button got pushed! If all else fails I'm more than happy to go try that.
I ran Ed's Superantispyware and all it came up with were some tracking cookies from sites that I've searched today for answers and a few existing allowed programs. So AVG, TrendMicro, and Super... all nothing. I even scanned my external HD with the bkup file separately in addition to whole system just in case.
The whole backup deal really bothers me because I've applied a backup before and it took just as long, or almost as long, as the original backup (28+ hours in this case). Yet, this application took less than four - it really freaked me out and should have been my first clue that it didn't work as I intended.
Yes, Windows Defender is loaded and UTD. Although, AVG seems to turn it off and I believe that is the only reason I was able to begin a defender scan in the midst of the attack before it shut that down too since it had already shut me out of Task Manager access. I usually run Defender when/if I have concerns over sites visited, programs installed, etc. And, of course, Windows Auto update is on and runs that pretty much each time too. I usually have (but have not loaded back) Seach&Destroy and only run that occassionally as too much AV/ASPY stuff running at same time causes problems. I am aware of Hijackthis, but have never used it (never been hit with a virus before - lucky me) and would need someone to decipher the info (you?) if you would like me to do that. I really don't think that Worm/Trojan is issue at this point unless it affected my bkup somehow (I jerked it out really fast). And then there is the issue that the drive was wiped reformated and the OS installed clean.
Yes. "Restore" has been turned off since earlier today on all drives (:c was turned off after your first post). My other internal HD and the external were never on 'restore' before the attack (the restore partition is not large enough to handle all of my drives, especially my external backup HD - it's at the 1TB max- and I must clean down the other HD's before I back up each time to get it to fit (think there may be 3G or less available), and I immediately removed them after the fresh install so that nothing on them would be affected or put strain on the partition allowance.
FYI, I've contacted Microsoft CS because after searching the tech base articles, the Windows installer may have an issue and may have been corrupted because the MCE oem CD is old now - it could have caused the bk file to not reinstall properly, as well as any other Windows installer dependent program (outlook, Media Center, Nero, Hauppague, Word, etc.). I did download their installer cleaner utility, but when I tried it, nothing came up in my system as the directions explained...sooooo. Just one more place to look and wait on.
Look forward to any other assistance, and can't thank you enough for taking the time!