Generic Host Process for Win32 Services error keeps coming up

My boss gave me his PC and he says you can leave it sit there after logging in and that message would pop up.

"Generic Host Process for Win32 Services

Generic Host Process for Win32 has encountered a problem and needs to close. We are sorry for the inconvenience"

and when you click the blue "click here" to see what data the error report contains, it says

zzAppname: svchost.exe
zzAppVer 5.1.2600.5512
zzModName: ntdll.dll

This started happening after he got some malware which I used malwarebytes and removed it. I scanned with a few apps and they all come up clean so I do not think its malware.

I ran "sfc /scannow" and rebooted and there is no change, sometimes it comes right up after a reboot, and other times it takes a little while but it does come up and when you close the error the taskbar is unusable, move the mouse over it and I get an hourglass.

I really dont want to reformat this PC its a last resort does anyone know of a way to fix this?

Thanks!

edit: Forgot to mention its running XP Service Pack 3

 

Hi Dave,

Thanks for the response. I was looking around online and I found something called tsddkiller and hitman pro and ran both of them and tsdd found a rootkit which it removed and hitman pro found a fake IE proxy and removed it, since then I havent seen the error pop up, but then again, yesterday it took about 5-6hrs of idle time for it to finally come up, right now the PC is sitting idle so I can see if it comes up again.