WIN32 keeps failing causing internet failure

I have run through all the stages in the READ AND RUN THROUGH ME FIRST thread.

Whilst using the internet I keep on getting an error message saying that
Generic Host Process for WIN32 Services has failed and probably needs to close. As soon as this happens the internet drops and I cannot reconnect until I restart the computer.
It also seems to mess up Windows Media Player both in appearance and it removes the sound. It also does not allow me to play mp3's, WM files etc.
After having the same problem, my girlfriend reported that the offline game that she began to play after a restart had also had all the sound settings turned to zero. She also reports that the game crashes alot which may or may not be related; it is a high end game graphically.

I include a HJthis log, a runkeys.txt and a newfiles.txt in this post.
I will include an Activescan.txt, a Counterspy report and a AIDA32 report as an additional post.
I will then include a bdscan report in my last post.

n.b. I had to run BITDEFENDER and PANDA ACTIVE SCAN in normal mode, PANDA found 2 things; a piece of spyware and a hacking vulnerablility. I could not fully update Spybot because this seemed to freeze my system.

I hope that you can help.
Thanks.

 

Okay I can't post the AIDA32 report because it is too big. I will post part of it in my next post and if you need more, let me know.

 

OK, I have cut the AIDA32 report in half and posted it as two seperate text files.

I hope that this gives yo enough to be going on with.

Thanks in advance.

 

Okay, will do. Thanks.

I really thought it was malware though since all the problems seem to follow the error message which is always online after a series of pop-ups .... nm ... software it is.