I checked the system just like you wrote, but it didn't fix the hidden iexplorer.
This is the hijackthis log.
Logfile of HijackThis v1.99.1
Scan saved at 12:28:37 AM, on 7/31/2006
Platform: Windows XP SP2 (WinNT 5.01.2600)
MSIE: Internet Explorer v6.00 SP2 (6.00.2900.2180)
Running processes:
C:\WINDOWS\System32\smss.exe
C:\WINDOWS\system32\winlogon.exe
C:\WINDOWS\system32\services.exe
C:\WINDOWS\system32\lsass.exe
C:\WINDOWS\system32\Ati2evxx.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\Program Files\Nero\Nero 7\InCD\InCDsrv.exe
C:\WINDOWS\system32\spoolsv.exe
C:\Program Files\Kaspersky Lab\Kaspersky Anti-Virus 6.0\avp.exe
C:\Program Files\ewido anti-spyware 4.0\guard.exe
C:\WINDOWS\system32\Ati2evxx.exe
C:\WINDOWS\Explorer.EXE
C:\WINDOWS\system32\wuauclt.exe
C:\Program Files\Kaspersky Lab\Kaspersky Anti-Virus 6.0\avp.exe
C:\Program Files\ewido anti-spyware 4.0\ewido.exe
C:\Program Files\WinRAR\WinRAR.exe
C:\DOCUME~1\Garrett\LOCALS~1\Temp\Rar$EX00.281\HijackThis.exe
R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Default_Search_URL = about:blank
R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Search Bar = about:blank
R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Search Page = about:blank
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Search Page = about:blank
R0 - HKLM\Software\Microsoft\Internet Explorer\Search,SearchAssistant =
http://www.mrfindalot.com/search.asp?si=
R0 - HKLM\Software\Microsoft\Internet Explorer\Search,CustomizeSearch =
http://www.mrfindalot.com/search.asp?si=
R3 - URLSearchHook: (no name) - {02EE5B04-F144-47BB-83FB-A60BD91B74A9} - (no file)
F2 - REG:system.ini: UserInit=C:\WINDOWS\system32\userinit.exe,vyxuvvr.exe
O2 - BHO: Yahoo! Toolbar Helper - {02478D38-C3F9-4EFB-9B51-7695ECA05670} - C:\Program Files\Yahoo!\Companion\Installs\cpn\yt.dll
O2 - BHO: (no name) - {53707962-6F74-2D53-2644-206D7942484F} - C:\PROGRA~1\SPYBOT~1\SDHelper.dll
O3 - Toolbar: Morpheus Toolbar - {119DBEDA-9c41-4F97-94B4-B6BCD01133CF} - C:\Program Files\Morpheus Toolbar\morpheustoolbar.dll
O3 - Toolbar: Yahoo! Toolbar - {EF99BD32-C1FB-11D2-892F-0090271D4F88} - C:\Program Files\Yahoo!\Companion\Installs\cpn\yt.dll
O4 - HKLM\..\Run: [kav] "C:\Program Files\Kaspersky Lab\Kaspersky Anti-Virus 6.0\avp.exe"
O4 - HKLM\..\Run: [!ewido] "C:\Program Files\ewido anti-spyware 4.0\ewido.exe" /minimized
O4 - HKLM\..\Run: [SunJavaUpdateSched] C:\Program Files\Java\jre1.5.0_07\bin\jusched.exe
O4 - HKLM\..\Run: [SoundMan] SOUNDMAN.EXE
O4 - HKLM\..\Run: [PHIME2002ASync] C:\WINDOWS\system32\IME\TINTLGNT\TINTSETP.EXE /SYNC
O4 - HKLM\..\Run: [PHIME2002A] C:\WINDOWS\system32\IME\TINTLGNT\TINTSETP.EXE /IMEName
O4 - HKLM\..\Run: [NeroFilterCheck] C:\WINDOWS\system32\NeroCheck.exe
O4 - HKLM\..\Run: [InCD] C:\Program Files\Nero\Nero 7\InCD\InCD.exe
O4 - HKLM\..\Run: [IMJPMIG8.1] "C:\WINDOWS\IME\imjp8_1\IMJPMIG.EXE" /Spoil /RemAdvDef /Migration32
O4 - HKCU\..\Run: [SpybotSD TeaTimer] C:\Program Files\Spybot - Search & Destroy\TeaTimer.exe
O4 - HKCU\..\Run: [CTFMON.EXE] C:\WINDOWS\system32\ctfmon.exe
O9 - Extra button: (no name) - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.5.0_07\bin\ssv.dll
O9 - Extra 'Tools' menuitem: Sun Java Console - {08B0E5C0-4FCB-11CF-AAA5-00401C608501} - C:\Program Files\Java\jre1.5.0_07\bin\ssv.dll
O9 - Extra button: Morpheus Toolbar - {119DBEDA-9c41-4F97-94B4-B6BCD01133CF} - C:\Program Files\Morpheus Toolbar\morpheustoolbar.dll
O9 - Extra 'Tools' menuitem: Morpheus Toolbar - {119DBEDA-9c41-4F97-94B4-B6BCD01133CF} - C:\Program Files\Morpheus Toolbar\morpheustoolbar.dll
O9 - Extra button: Web Anti-Virus - {1F460357-8A94-4D71-9CA3-AA4ACF32ED8E} - C:\Program Files\Kaspersky Lab\Kaspersky Anti-Virus 6.0\scieplugin.dll
O9 - Extra button: AIM - {AC9E2541-2814-11d5-BC6D-00B0D0A1DE45} - C:\Program Files\AIM\aim.exe
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
O18 - Protocol: livecall - {828030A1-22C1-4009-854F-8E305202313F} - C:\PROGRA~1\MSNMES~1\MSGRAP~1.DLL
O18 - Protocol: msnim - {828030A1-22C1-4009-854F-8E305202313F} - C:\PROGRA~1\MSNMES~1\MSGRAP~1.DLL
O18 - Filter: text/html - {B5F86455-BF18-4E12-965A-6642A0AC0549} - (no file)
O20 - AppInit_DLLs: repairs303169590.dll
O20 - Winlogon Notify: App Management - C:\WINDOWS\
O20 - Winlogon Notify: klogon - C:\WINDOWS\system32\klogon.dll
O23 - Service: Ati HotKey Poller - ATI Technologies Inc. - C:\WINDOWS\system32\Ati2evxx.exe
O23 - Service: ATI Smart - Unknown owner - C:\WINDOWS\system32\ati2sgag.exe
O23 - Service: Kaspersky Anti-Virus 6.0 (AVP) - Unknown owner - C:\Program Files\Kaspersky Lab\Kaspersky Anti-Virus 6.0\avp.exe" -r (file missing)
O23 - Service: ewido anti-spyware 4.0 guard - Anti-Malware Development a.s. - C:\Program Files\ewido anti-spyware 4.0\guard.exe
O23 - Service: InstallDriver Table Manager (IDriverT) - Macrovision Corporation - C:\Program Files\Common Files\InstallShield\Driver\11\Intel 32\IDriverT.exe
O23 - Service: InCD Helper (InCDsrv) - Nero AG - C:\Program Files\Nero\Nero 7\InCD\InCDsrv.exe