I can't open programs/internet/only folders on my desktop

No idea what it is. As soon as I start my compute about 20 seconds in my desktop disapears and it 's a wallpaper that looks like blue tiny binary code and over it it has 4 sections of type.

1st in large red
" Warning! Your Computer is infected with spyware. "

Next in medium font in white
" All you do with computer is stored forever in your hard disk. When you visit sites, send e-mails... all your actions are logged. And it is impossible to remove them with standard tools. Your data is still available for forensics. And in some cases "

it actuall stops mid sentance goes down 3 to 4 lines and gets a smaller white fonte and continues. By the way it's all in capitals, each paragraph. 3rd paragraph continues on to say, now in lower case
" for your boss your friends , your wife, your children." Same paragraph but the font gets smaller " Every site you or somebody or even something, like spyware, opened in your browsers, with all the images, and all the downloaded and maybe later removed movies or mp3 songs, ARE STILL THERE and could break your life."

4th says
"Secure Yourself Right Now ! Remove all Spyware frome your PC!"
Again big red large font.

Then a pop up comes up reads " System Security Protect your PC" and begins scanning my computer. Tells me I have 38 differnt viruses. I can't turn it off. It won't go away. If I control alt delete to get rid of it the Windows Task Manager if it even opens shuts down immedietly. When done it asks me to remove, if I click the remove button it opens Activate System Security window" If I hit yes it opens a window to buy the prorgam. However it won't let me open AOL, Explorer, Firefox, AIM, Yahoo Messenger my Antivirus PC-cilin from Trend Micro which is not installed on the computer but a CD Rom in my hard drive currently ( I know, what I get for not installing sooner ). If it's a folder I Can open it. If a program, nothing happens. THe icon for this is a Yellow Shield with Black Stripes. Not the most computer savy. So any advice right now is completely helpful. And if you can answe in ... "Computes for Dummies" Way be great cause it most likely may be over my head other wise.

Thanks in advance.

 

P.S. Eventually a Security Moniter: Warning pops up mentioning something about TrojanSPM/LX was