Hijack This & advice to kill Win98 problem

Long story, but here goes. Customer says she can't use Adobe Acrobat or Internet Explorer. OS is Win98 SE; scan for spyware in Safe Mode with AdAware SE and found 630+ items, including stuff like Claria, VX2, and 180 Solutions, but, thank God, no Cool Web Search. A second scan in Safe Mode found zero items. Next, scanned with Spybot Search & Destroy (Safe Mode), which found 37 items, including TIBS (what is that?), a program she had installed called SpywareHunter (she said a computer guy had installed it). I removed all items except SpywareHunter, then proceeded to reboot. Uninstalled SpywareHunter upon reboot. Computer still froze when bringing up IE (couldn't access the About tab or Internet Options). Next, tried to install Windows Security Updates February 2004 CD, and it choked on it. Every time I'd try to update IE, the install would show up as Not Responding in the Close Program box. So, the updates were failing. Her Norton Internet Security also failed on reboot (meaning no longer showed up in the System Tray); an install and subsequent scan with AVG 6.0 found only 1 virus, SecThought.E (file was install026.exe), was removed and deleted from virus vault. So now, upon bootup, IE still won't run, and for some reason, her Dial-Up Connection box always pops up and can't be killed. Also, Adobe Acrobat begins to come up, but gives me a gray box (no info) with an "X" in the upper right hand corner. So, now I'm stumped and told her I'd be back tomorrow. System File Checker found nothing either. Ok folks, what should I try next?

I am posting every possible HiJack This log I could make with that program. No, I didn't have the updated version (only had 1.97.7), and obviously couldn't download it either. My battle plan so far tomorrow is this:

1. Run CoolWebShredder 2.0 (don't think that's it)
2. Scan with Nai's Stinger.
3. Beyond that, I don't know, that's why I'm here. (may have to clean install, worst case)

My guess is that something has written over files dealing with IE (like a spyware toolbar), and has damaged it so much that it's beyond repair. IERadicator might be a possibliity, but I don't know. She also said that she has Family Video for her internet provider, had recently installed their Internet Accelerator software. Could that be causing this? Argh....

Let me know what you think after you look at these logs.

[Log removed]

 

READ ME FIRST: Basic Spyware, Trojan And Virus Removal.

Hijack This Tutorial And How To Post Your Log File

 

and get an updated version onto the pc(there are ways)