System Defender problem (and possibly others)

Hey,
Today, I was browsing the web when System Defender was first installed on my laptop. When I realised what was was going on, I managed to quickly open task manager and end a few suspicious processes. This managed to stop most of the symptoms I could see, such as the system tray icon and the pop-ups (Which opened up in IE even though my default browser is Firefox).
After some further browsing for a solution, I discovered that an would pop-up every so often in Firefox.

It was at this point that I noticed that my antivirus (Norton) had disappeared from the system tray and that I couldn't open task manager again. Here, I downloaded Spybot S&D (I had my computer wiped clean about a month ago, and as I hadn't had a virus scare in quite a while, I had completely forgotten about downloading and installing antivirus and spyware protection.) The scan returned a number of results, which i tried to fix, which removed all but 15 or so infections which failed due to access being denied to a "host" file or something like that...

I then proceded to follow the Read & Run, followed by the Windows XP Cleaning procedure. Before commencing the instructions though, I proceeded to disable Teatimer. It was when I restarted my computer when the problem suddenly got worse.

After restarting, the computer became ridiculously slow. After continual force shutdown - restarting, I noticed that something called "Unlock" would open in the task bar. The computer will not even fully start up, with the usual start up programs (msn, norton, etc.) not opening up, and programs will not open.

Any help on solving this problem is appreciated and sorry for the wall of text.
Thanks in advance. -jwai