Windows Explorer AND Internet Explorer

Got a strange problem that has arisen in the past few days (running WinXP sp2). I keep a fairly tight ship running AVG pro and Spy Bot as well as Windows Defender and usuallly clean out everyting one a month or so (temp folders) or daily history, Internet files, etc. Every so often I do a defrag.

1. When I boot up the PC it operates fine for up to about 30mins then....
2. Windows Explorer can be opened, but any selection reverts back to the default 'My Documents' highlight immediately it is selected. i.e. it is impossible to browse the filing system.
3. Internet Explorer returns back to the homepage (in my case, google.com)
4. If IE is closed and reopened it opens to no page - i.e. it doesn't say 'about blank' there is just an empty window and although you can write to the address bar nothing happens, it does not even search for the url. All of the favorites URLs have the same effect, i.e. none at all.

On reboot everything is OK again until it starts to go awol after a random amound of time.

I researched the MS update pages and there seems to be some suggestion that this may have been caused by a security update in December (that would match the timing of my problem - the past two weeks)

Has anyone got any suggestions?

 

Update to the above problem:

AVG, CCleaner, MG etc found nothing unusual. The problem is still there and I am tempted to reinstall the operating system.

 

Yes I tried that - I removed one update at a time until there were none left to unload!
Unfortunatley it didn't solve the problem.
It looks like it's a bare metal job again...

 

This is becoming a nightmare, I have done more than a bare metal reformat, I bought a new hard drive and reloaded window XP sp2 and the problem is still here.

Windows Explorer jumps from the selected folder or file right back to the top folder (desktop) in the tree.

Internet Explorer just fails to find any pages and returns no error of any kind - just silence.

I am completely flummoxed. What can survive a new hard drive and new operating system? Is there any way that I have the bios infected with something? I know nothing about bios infections (if they exist)

Does anyone have any ideas???