Hey, thanks for your help, but I don't think the problem is solved. I tired the first method and then the second too {posted by pushkaraj}(everything except the Panda Online..). The icons still keep reappearing, the Log file still contains the xpa.exe entry, but the folder(XP Antivirus) from the program files is gone .
Moreover, i tried installing Nod32, Avast, Spybot on the machine, none of it is installing, everywhere the same corrupt installer error appears. Is this a work of the virus or can all those installers really be corrupt? the avast and Nod 32 installers i have tried at home, and they work fine. Are there any other alternative solutions? Will a system restore to some previous point help??
Here is the logfile, please help me out! Its my Office PC which needs immediate attention! I dont want to format my harddisks!!!!!!!!!
Logfile of Trend Micro HijackThis v2.0.2
Scan saved at 1:20:47

, on 10/07/2008
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\csrss.exe
C:\WINDOWS\system32\winlogon.exe
C:\WINDOWS\system32\services.exe
C:\WINDOWS\system32\lsass.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\Program Files\Lavasoft\Ad-Aware\aawservice.exe
C:\WINDOWS\Explorer.EXE
C:\WINDOWS\system32\spoolsv.exe
C:\WINDOWS\system32\hkcmd.exe
C:\Program Files\Java\jre1.6.0_02\bin\jusched.exe
C:\Program Files\Hewlett-Packard\OrderReminder\OrderReminder\OrderReminder. exe
C:\Program Files\Common Files\Ahead\Lib\NMBgMonitor.exe
C:\WINDOWS\system32\ctfmon.exe
C:\MSSQL7\Binn\sqlmangr.exe
C:\Program Files\Common Files\Microsoft Shared\VS7DEBUG\MDM.EXE
C:\MSSQL7\binn\sqlservr.exe
C:\Program Files\Common Files\Ahead\Lib\NMIndexStoreSvr.exe
C:\WINDOWS\system32\hpzipm12.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\wdfmgr.exe
C:\Program Files\Common Files\Ahead\Lib\NMIndexingService.exe
C:\WINDOWS\System32\alg.exe
C:\WINDOWS\System32\msiexec.exe
C:\WINDOWS\system32\wuauclt.exe
C:\Program Files\Trend Micro\HijackThis\HijackThis.exe
C:\WINDOWS\System32\wbem\wmiprvse.exe
R0 - HKCU\Software\Microsoft\Internet Explorer\Main,Start Page =
http://www.yahoo.com/
R1 - HKCU\Software\Microsoft\Windows\CurrentVersion\Int ernet Settings,ProxyServer = 172.168.0.1:3128
F3 - REG:win.ini: run="C:\WINDOWS\system32\winupdate.exe"
O4 - HKLM\..\Run: [IgfxTray] C:\WINDOWS\system32\igfxtray.exe
O4 - HKLM\..\Run: [HotKeysCmds] C:\WINDOWS\system32\hkcmd.exe
O4 - HKLM\..\Run: [NeroFilterCheck] C:\Program Files\Common Files\Ahead\Lib\NeroCheck.exe
O4 - HKLM\..\Run: [QuickTime Task] "C:\Program Files\QuickTime\QTTask.exe" -atboottime
O4 - HKLM\..\Run: [SunJavaUpdateSched] "C:\Program Files\Java\jre1.6.0_02\bin\jusched.exe"
O4 - HKLM\..\Run: [OrderReminder] C:\Program Files\Hewlett-Packard\OrderReminder\OrderReminder\OrderReminder. exe
O4 - HKLM\..\Run: [C:\WINDOWS\system32\kdkiv.exe] C:\WINDOWS\system32\kdkiv.exe
O4 - HKCU\..\Run: [BgMonitor_{79662E04-7C6C-4d9f-84C7-88D8A56B10AA}] "C:\Program Files\Common Files\Ahead\Lib\NMBgMonitor.exe"
O4 - HKCU\..\Run: [ctfmon.exe] C:\WINDOWS\system32\ctfmon.exe
O4 - HKCU\..\Run: [msserv] C:\WINDOWS\msserv.exe
O4 - HKCU\..\Run: [58816225442454609891642713430501] C:\Program Files\XP Antivirus\xpa.exe
O4 - Global Startup: Service Manager.lnk = C:\MSSQL7\Binn\sqlmangr.exe
O8 - Extra context menu item: E&xport to Microsoft Excel - res://C:\PROGRA~1\MICROS~2\Office10\EXCEL.EXE/3000
O9 - Extra button: (no name) - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_02\bin\ssv.dll
O9 - Extra 'Tools' menuitem: Sun Java Console - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.6.0_02\bin\ssv.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\..\{7B395256-A2E0-422E-BE76-A743482ABE15}: NameServer = 10.20.30.40,172.31.29.1
O23 - Service: Lavasoft Ad-Aware Service (aawservice) - Lavasoft - C:\Program Files\Lavasoft\Ad-Aware\aawservice.exe
O23 - Service: LiveUpdate - Symantec Corporation - C:\PROGRA~1\Symantec\LIVEUP~1\LUCOMS~1.EXE
O23 - Service: NBService - Nero AG - C:\Program Files\Nero\Nero 7\Nero BackItUp\NBService.exe
O23 - Service: NMIndexingService - Nero AG - C:\Program Files\Common Files\Ahead\Lib\NMIndexingService.exe
O23 - Service: Pml Driver HPZ12 - HP - C:\WINDOWS\system32\hpzipm12.exe
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End of file - 3902 bytes