Crashing XP

I'm sorry but I'm really not all that high tech : ( Big words may confuse me.


I was torrenting something and surfing the internet and at the time my fire wall was turned off then all of a sudden my screen turned blue and my computer crashed after that I turned off my computer.

Then I rebooted it and it asked me how I wanted to start it up. I did normal then windows started to load and after words blue screen shows up for about 3 seconds and then turns off the computer and reboots it's self.

The numbers in the screen are.

0x0000007F (0x,00000008, 0x80042000. 0x0000000, 0x00000000)

Nothing was below it.

What problem is this and how do I fix it?

 

Okay I'm back. Things have gottan much simpler (I think).

I logged on and it didn't crash . How ever my desktops background says

Warning!
Spyware detected on your computer!
Install an antivirus program or spysweeper remover to clean your computer.​

At the minute I currently have Spysweeper and Norton securtity scan running.

I recall the name my windows fire wall was asking about before it crashed and found it in task manager - Svchost I actually found it listed 5 times on task manager.

Just a few minutes ago trend micro antivirus has found 2 virus both Cryp Xed-3 and has given me a location for both of them. Do I just let spysweeper take care of it?

What damages could have been done?

Is it safe to turn on my wireless connection? (Turned it off last night.)

What other precautions should I take?