What do I do now?
The best advice I can give is back up your data to an external source ASAP. This should be your top priority! i.e. backup to a, external hard drive, or services like dropbox.com. Generally my rule of thumb is data doesn’t exist until it is in at least three separate places. i.e. in the cloud and on a USB backup at a different location. Don't use a backup/restore solution. They create proprietary formats that can get corrupted,etc. Just literally copy the files.
Synctoy is good for this operation.
MSRT, Your last lifeline
The only thing you may be able to do with small chance of success is download and run the latest MSRT from Microsoft
However I doubt this will work. So…
The Full Restore
You should figure out how to do a Factory Restore on your machine. You might have been given disks or there might be a restore partition on your HDD. Check your manufacturers website for this info. I can't help you much here, as it varies by machine. If you have neither… Ubuntu Linux might be your best option.
Why a full restore?
You have to do the full restore to be sure because once a machine has been infected you’ll never be 100% certain the virus is off. Viruses are nasty and hide in all sorts of places that remove programs don’t get. Anyone who claims they can remove it is either deluded or lying to you. The difference is that the ones that are lying are also charging you for labor. You'll waste more time and $ trying to fix it than it would take to backup your data,
Once you’ve restored your system, and reinstalled everything. Ugh, right?
Microsft Security Essentials
Install Microsoft Security Essentials, its free, works well enough, and defintion updates are not subscription based. Although keep in mind, no AV software will catch 100% of the existing threats.
If you’re willing to punt on Microsoft, as more and more people are doing each day, usually to Mac, Ubuntu Linux Desktop is perhaps an option.
If your machine is XP, you should probably switch to Linux anyway as XP will no longer be supported as of April and your machine probably can’t run Windows 7. You think you have viruses now!
Although it does have an adjustment period, if you’re one of those people that just leave your machine alone and just expect it to work, Linux is probably your best be. While some think it's a bit geeky, I disagree. Linux has some rough edges, but its also rock solid regarding stablity, its trivial to keep updated, and gaming is becoming a focus. Never discount the power of staying updated. Infinite free upgrades are nice, and Ubuntu Linux has always had this, now that Macintosh does too, people will begin expecting this… I'm looking at you Microsoft!
The Ubuntu website has a few links that show you how to create a DVD if you have a burner, or tell you how you can buy a copy. If you know someone who can do the CD/DVD burn you might want to meet them for coffee, and buy. You probably need the 32-bit version for an older machine, if not more power to you. Just don't download the 64-bit version and complain to me that you don't have 64-bit architecture. :)
Things you’ll (maybe) lose
A lot of the Apple iPod synching nice-ness will go away. The linux iTunes variants still work with regular iPods and there is iCloud for iPod touches, but this may not be what you want. However if you’re just synching music, it’ll most likely be fine. The UI will just be clunkier, and you may have to reformat your iPod the first time, but you're probably going to have to do this with a system restore anyway.
You’ll also kind of lose the pure Microsoft Office experience. This may be a good thing though. LibreOffice doesn’t cut it for some people, although it doesn’t bother me. You can always try it out if you're curious on Windows as its free, as in beer.
However in today's web only environments... perhaps Office365 or Google Docs will suffice, as that’s in browser and will probably do most of what you want. Pair it with LibreOffice and this may be ideal. This is the future trend anyway, so you might want to get used to it now.
The Ubuntu option may be a deal breaker for some, but then again there is a very high probability that you won’t get viruses anymore, and you can always upgrade to the latest version.
If you really want to know what its like to have most of your systems memory free and ready for you to stress test it, perhaps you'll consider the super light weight XUbuntu which comes packaged with the LXDE desktop manager.
LXDE is still may favorite all around window manager, initial setup can require some Google-FU but if you just take the defaults it'll feel A LOT like a Windows system. I'm more of the Macintosh style though so its important for me to switch those window functions (minimize, maximize, and close) to the left side.