My XP doesn't save settings, amongst other problems! HELP!

I had the Windows Police Pro virus thing, or whatever exactly it was called, and that lead to many pop-ups and more problems with my laptop. I was running Windows XP SP2 on my 4 year old Gateway laptop. I couldn't seem to do a thing on it but was able to d/l TeamViewer and I gave my friend remote access to it. For the next 48 hours he worked and I worked. We could not open any virus programs such as my MalwareBytes or AVG, as the virus would always just shut them down, even in Safe Mode. We used a certain company's "we fix it for you disc" to boot through and work. It found problems, of course, then we tried installing and running various scanner but to no avail. Eventually, we just tried renaming the scanners such as MalwareBytes, HijackThis, and others. ComboFix worked! It found this big and nasty SKYNET rootkit that was wreaking havoc in my registry. I thought the problems were all fixed. I ran the scanners again and it seemed clean.

Then more problems.

Everytime I turn the computer on, it seems to overheat now. The active desktop does not ever apply a new background image. It always goes back to a plain blue screen. Every time I open a program, it goes through update and installation/setup (Microsoft Word, AIM, Mozilla, amongst others) and neither him nor I can find out why. I ran the MRI FACE program again yesterday and it didn't fix the problems. I have MalwareBytes, HijackThis, Spyware Doctor, and Spybot Search & Destroy. Apparently without me noticing, my friend also upgraded and/or reformatted my computer to now having XP Service Pack 3. I thought about contacting Microsoft but I will not spend $59 to not even have a guarantee about it getting fixed. There were some weird policies on my computer after all of removal the first time, like not allowing registry tools.

I am at my, and my friend's, wits end on this one. Can anyone help me????

 

Great. I will go through that list of everything, run the scans, and update with what has happened. If someone would, please move this to wherever it needs to go. Thanks again.