pls help..here's my hijacthis log..

my computer keeps on creating newfolder.exe and other application files in every folder, even when i plug my usb, it also creates it..

Logfile of Trend Micro HijackThis v2.0.2
Scan saved at 9:05:19 PM, on 12/21/2008
Platform: Windows XP SP2 (WinNT 5.01.2600)
MSIE: Internet Explorer v6.00 SP2 (6.00.2900.2180)
Boot mode: Normal

Running processes:
C:\WINDOWS\System32\smss.exe
C:\WINDOWS\system32\winlogon.exe
C:\WINDOWS\system32\services.exe
C:\WINDOWS\system32\lsass.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\spoolsv.exe
C:\WINDOWS\system32\drivers\CDAC11BA.EXE
C:\WINDOWS\System32\nvsvc32.exe
C:\WINDOWS\System32\svchost.exe
C:\Program Files\TeamViewer3\TeamViewer_Service.exe
C:\WINDOWS\DisplayMonitor.exe
C:\WINDOWS\Explorer.EXE
C:\WINDOWS\cmd.exe
C:\WINDOWS\system32\RUNDLL32.EXE
C:\WINDOWS\RTHDCPL.EXE
C:\Program Files\CursorXP\CursorXP.exe
C:\Documents and Settings\All Users\Start Menu\Programs\Startup\Setup.exe
C:\WINDOWS\system\reg32.exe
C:\Program Files\Yahoo!\Messenger\ymsgr_tray.exe
C:\Program Files\TeamViewer3\TeamViewer.exe
C:\WINDOWS\system32\wscntfy.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\system32\wuauclt.exe
C:\WINDOWS\system32\wuauclt.exe
C:\WINDOWS\system32\NOTEPAD.EXE
C:\WINDOWS\system32\NOTEPAD.EXE
C:\Program Files\Trend Micro\HijackThis\HijackThis.exe

F2 - REG:system.ini: Shell=explorer.exe, C:\WINDOWS\cmd.exe
F2 - REG:system.ini: UserInit=C:\WINDOWS\system32\userinit.exe,C:\WINDOWS\DisplayMonitor.exe
O2 - BHO: IEHlprObj Class - {CE7C3CF0-4B15-11D1-ABED-709549C10000} - C:\WINDOWS\system32\ieso0.dll
O4 - HKLM\..\Run: [NvCplDaemon] RUNDLL32.EXE C:\WINDOWS\System32\NvCpl.dll,NvStartup
O4 - HKLM\..\Run: [nwiz] nwiz.exe /install
O4 - HKLM\..\Run: [NvMediaCenter] RUNDLL32.EXE C:\WINDOWS\System32\NvMcTray.dll,NvTaskbarInit
O4 - HKLM\..\Run: [RTHDCPL] RTHDCPL.EXE
O4 - HKLM\..\Run: [Alcmtr] ALCMTR.EXE
O4 - HKLM\..\Run: [NVIDIA Display] C:\WINDOWS\DisplayMonitor.exe
O4 - HKLM\..\Run: [Win32 Console] C:\WINDOWS\cmd.exe
O4 - HKCU\..\Run: [CursorXP] C:\Program Files\CursorXP\CursorXP.exe
O4 - HKCU\..\Run: [Messenger (Yahoo!)] "C:\Program Files\Yahoo!\Messenger\YahooMessenger.exe" -quiet
O4 - HKCU\..\Run: [kxva] C:\WINDOWS\system32\kxvo.exe
O4 - Global Startup: Setup.exe
O8 - Extra context menu item: E&xport to Microsoft Excel - res://C:\PROGRA~1\MICROS~2\OFFICE11\EXCEL.EXE/3000
O9 - Extra button: Research - {92780B25-18CC-41C8-B9BE-3C9C571A8263} - C:\PROGRA~1\MICROS~2\OFFICE11\REFIEBAR.DLL
O9 - Extra button: Messenger - {FB5F1910-F110-11d2-BB9E-00C04F795683} - C:\Program Files\Messenger\msmsgs.exe
O9 - Extra 'Tools' menuitem: Windows Messenger - {FB5F1910-F110-11d2-BB9E-00C04F795683} - C:\Program Files\Messenger\msmsgs.exe
O23 - Service: Autodesk Licensing Service - Autodesk - C:\Program Files\Common Files\Autodesk Shared\Service\AdskScSrv.exe
O23 - Service: C-DillaCdaC11BA - Macrovision - C:\WINDOWS\system32\drivers\CDAC11BA.EXE
O23 - Service: NVIDIA Display Driver Service (NVSvc) - NVIDIA Corporation - C:\WINDOWS\System32\nvsvc32.exe
O23 - Service: TeamViewer 3 (TeamViewer) - TeamViewer GmbH - C:\Program Files\TeamViewer3\TeamViewer_Service.exe

--
End of file - 3109 bytes

Hi emjez15

One or more of the identified infections is a backdoor trojan.

This allows hackers to remotely control your computer, steal critical system information and Download and Execute files

I would counsel you to disconnect this PC from the Internet immediately. If you do any banking or other financial transactions on the PC or if it should contain any other sensitive information, please get to a known clean computer and change all passwords where applicable, and it would be wise to contact those same financial institutions to apprise them of your situation.

Though the Trojan has been identified and can be killed, because of it's backdoor functionality, your PC is very likely compromised and there is no way to be sure your computer can ever again be trusted. Many experts in the security community believe that once infected with this type of Trojan, the best course of action would be a reformat and reinstall of the OS. Please read these for more information:

How Do I Handle Possible Identify Theft, Internet Fraud and CC Fraud?

When Should I Format, How Should I Reinstall

We can attempt to clean this machine but I can't guarantee that it will be 100% secure afterwards.

Should you have any questions, please feel free to ask.

Please let us know what you have decided to do in your next post.

lack of response