Spyware Strike - Malware posing as anti-spyware software?

Dell P4 running XP home A fake bubble alert in the lower right corner keeps popping up saying:

"System Intrusion Detected! Dangerous infection was detected on your PC. The system will now download and install most efficient anti malware program to prevent data loss and your most private information theft. Click here to protect your computer from the biggest malware threats. "

if the bubble is clicked, it installs the aplication and loads the web page asking for payment. I have been unable to remove this malware using hijack this, AVG, ewido and ad-aware SE.

My hijack this log, in case it helps:

Logfile of HijackThis v1.99.1
Scan saved at 2:00:35 PM, on 1/7/2006
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\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\LEXBCES.EXE
C:\WINDOWS\system32\spoolsv.exe
C:\WINDOWS\system32\LEXPPS.EXE
C:\PROGRA~1\Grisoft\AVGFRE~1\avgamsvr.exe
C:\PROGRA~1\Grisoft\AVGFRE~1\avgupsvc.exe
C:\PROGRA~1\Grisoft\AVGFRE~1\avgemc.exe
C:\WINDOWS\System32\nvsvc32.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\Explorer.EXE
C:\PROGRA~1\Grisoft\AVGFRE~1\avgcc.exe
C:\Program Files\iTunes\iTunesHelper.exe
C:\Program Files\Dell Support\DSAgnt.exe
C:\Program Files\iPod\bin\iPodService.exe
C:\WINDOWS\system32\ctfmon.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Program Files\ewido anti-malware\ewidoguard.exe
C:\Program Files\ewido anti-malware\ewidoctrl.exe
C:\Program Files\ewido anti-malware\securitysuite.exe
C:\onsite\hijackthis\HijackThis.exe

O4 - HKLM\..\Run: [AVG7_CC] C:\PROGRA~1\Grisoft\AVGFRE~1\avgcc.exe /STARTUP
O4 - HKLM\..\Run: [iTunesHelper] "C:\Program Files\iTunes\iTunesHelper.exe"
O4 - HKCU\..\Run: [DellSupport] "C:\Program Files\Dell Support\DSAgnt.exe" /startup
O4 - HKCU\..\Run: [ctfmon.exe] C:\WINDOWS\system32\ctfmon.exe
O16 - DPF: {17492023-C23A-453E-A040-C7C580BBF700} (Windows Genuine Advantage Validation Tool) - http://go.microsoft.com/fwlink/?linkid=39204
O23 - Service: AVG7 Alert Manager Server (Avg7Alrt) - GRISOFT, s.r.o. - C:\PROGRA~1\Grisoft\AVGFRE~1\avgamsvr.exe
O23 - Service: AVG7 Update Service (Avg7UpdSvc) - GRISOFT, s.r.o. - C:\PROGRA~1\Grisoft\AVGFRE~1\avgupsvc.exe
O23 - Service: AVG E-mail Scanner (AVGEMS) - GRISOFT, s.r.o. - C:\PROGRA~1\Grisoft\AVGFRE~1\avgemc.exe
O23 - Service: ewido security suite control - ewido networks - C:\Program Files\ewido anti-malware\ewidoctrl.exe
O23 - Service: ewido security suite guard - ewido networks - C:\Program Files\ewido anti-malware\ewidoguard.exe
O23 - Service: iPodService - Apple Computer, Inc. - C:\Program Files\iPod\bin\iPodService.exe
O23 - Service: LexBce Server (LexBceS) - Lexmark International, Inc. - C:\WINDOWS\system32\LEXBCES.EXE
O23 - Service: Intel NCS NetService (NetSvc) - Intel(R) Corporation - C:\Program Files\Intel\NCS\Sync\NetSvc.exe
O23 - Service: NVIDIA Driver Helper Service (NVSvc) - NVIDIA Corporation - C:\WINDOWS\System32\nvsvc32.exe
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