Just recently I had to fight with spyware and TONS of viruses.
Solution:
-download a free firewall from
http://www.webmasterfree.com/tpfw.html
-get antivirus and clean out your system (do not connect to the web after that, save installers for e-mail, internet browser, firewall, etc. on your hard drive or CD)
-format your system drive
-install windows, antivirus and firewall
-go through all settings of your internet browser and set it to ask your permission before doing anything, like accepting cookies, popups, etc.
-after firewall and antivirus are running you can connect to the outside world again.
E-mail or pm me if you have specific questions -- will help with what I can.
One of the first steps towards Windows security is not to use Internet Explorer and Outlook Express, they're virus and spyware collectors.