Win32/Parite

O poop, i "Think" i have a virus....

So my little brother downloaded a "Game" for free, when it didn't work he got suspicious. So he looked around for a while reading what people have said to try get it working and he finds out that its apparently a key logger so my brother gets me to help. Anyway, this guy posted an MSN address to contact him for removal details and he tells me the key logger injects itself into everything on the PC including explorer.exe and it is actually impossible to remove.

I asked how he knows and he simply replied "I helped code the virus with some friends but it wasn't made for this" this is where i though he was lier, but i scanned the file for the first time and there it came up as Win32/Parite. I read about this and it seems to fit the description of what he has told me but it says low risk, medium spread if it had a key logger surely it would be high risk but maybe he has adapted it to become more harmful.

I tried removing it with Anti-Parite from www.bitdefender.com and it got halfway through the removal and crashed, now i cant even run the removal tool for 30seconds.

I checked other PC on my network and now they seem to be infected also. All i ask is for a little help and a few questions answered and i know my brother has been stupid he should have scanned it before also i regret not having an anti virus installed i never expected anything like this would happen to me.

1) Is it possible for this to be a key logger or steal any harmful information from me?
2) How should i go about removing it (e.g. Unplug all PCs on network and run the scanner on each one) ?

Thanks for any help.