First to answer your questions:
1) Yes I can boot in safe mode and have done so, same problem still occurs
2) I am using a Dell PC
3) I am currently running Norton Anti-virus 2004 which I constantly update and check my system every Friday.
4) I performed the steps you suggested, with the exception of installing the firewall (I will do that as soon as I figure all this out

I am sorry to say that I still have the same problem. The virus scan came up clean, the Adware program got rid of a few more problem files, and I am now running with 85% of my resources.
5) I looked at all the programs in my Add/Remove Programs and nothing looked like it didn't belong. I have quite a few in there and it would take me awhile to type them all out, but I will if you think it would help
6) Here is my latest Hijack This file:
Logfile of HijackThis v1.97.7
Scan saved at 10:31:22 PM, on 4/16/04
Platform: Windows 98 SE (Win9x 4.10.2222A)
MSIE: Internet Explorer v6.00 (6.00.2600.0000)
Running processes:
C:\WINDOWS\SYSTEM\KERNEL32.DLL
C:\WINDOWS\SYSTEM\MSGSRV32.EXE
C:\WINDOWS\SYSTEM\MPREXE.EXE
C:\WINDOWS\SYSTEM\MSTASK.EXE
C:\PROGRAM FILES\COMMON FILES\SYMANTEC SHARED\CCEVTMGR.EXE
C:\PROGRAM FILES\COMMON FILES\SYMANTEC SHARED\CCSETMGR.EXE
C:\WINDOWS\SYSTEM\mmtask.tsk
C:\WINDOWS\EXPLORER.EXE
C:\WINDOWS\RUNDLL32.EXE
C:\WINDOWS\TASKMON.EXE
C:\WINDOWS\SYSTEM\SYSTRAY.EXE
C:\MOUSE\SYSTEM\EM_EXEC.EXE
C:\PROGRAM FILES\CREATIVE\SBLIVE\AUDIOHQ\AHQTB.EXE
C:\WINDOWS\SYSTEM\3CMLNKW.EXE
C:\PROGRAM FILES\COMMON FILES\SYMANTEC SHARED\CCPD-LC\SYMLCSVC.EXE
C:\PROGRAM FILES\COMMON FILES\SYMANTEC SHARED\CCAPP.EXE
C:\WINDOWS\SYSTEM\STIMON.EXE
C:\WINDOWS\SYSTEM\WMIEXE.EXE
C:\WINDOWS\SYSTEM\SPOOL32.EXE
C:\WINDOWS\SYSTEM\DDHELP.EXE
C:\MY DOCUMENTS\HIJACK\HIJACKTHIS.EXE
R1 - HKCU\Software\Microsoft\Windows\CurrentVersion\Internet Settings,ProxyOverride = 127.0.0.1
R3 - Default URLSearchHook is missing
O3 - Toolbar: &Radio - {8E718888-423F-11D2-876E-00A0C9082467} - C:\WINDOWS\SYSTEM\MSDXM.OCX
O3 - Toolbar: Norton AntiVirus - {42CDD1BF-3FFB-4238-8AD1-7859DF00B1D6} - c:\Program Files\Norton AntiVirus\NavShExt.dll
O4 - HKLM\..\Run: [ScanRegistry] c:\windows\scanregw.exe /autorun
O4 - HKLM\..\Run: [TaskMonitor] c:\windows\taskmon.exe
O4 - HKLM\..\Run: [SystemTray] SysTray.Exe
O4 - HKLM\..\Run: [EM_EXEC] c:\mouse\system\em_exec.exe
O4 - HKLM\..\Run: [LoadPowerProfile] Rundll32.exe powrprof.dll,LoadCurrentPwrScheme
O4 - HKLM\..\Run: [AudioHQ] C:\Program Files\Creative\SBLive\AudioHQ\AHQTB.EXE
O4 - HKLM\..\Run: [VsEcomrEXE] C:\Program Files\Network Associates\McAfee VirusScan\vsecomr.exe
O4 - HKLM\..\Run: [3Cmlink] c:\windows\SYSTEM\3cmlnkW.exe
O4 - HKLM\..\Run: [Symantec Core LC] C:\Program Files\Common Files\Symantec Shared\CCPD-LC\symlcsvc.exe start
O4 - HKLM\..\Run: [ccApp] "c:\Program Files\Common Files\Symantec Shared\ccApp.exe"
O4 - HKLM\..\Run: [StillImageMonitor] C:\WINDOWS\SYSTEM\STIMON.EXE
O4 - HKLM\..\RunServices: [LoadPowerProfile] Rundll32.exe powrprof.dll,LoadCurrentPwrScheme
O4 - HKLM\..\RunServices: [SchedulingAgent] mstask.exe
O4 - HKLM\..\RunServices: [ScriptBlocking] "C:\Program Files\Common Files\Symantec Shared\Script Blocking\SBServ.exe" -reg
O4 - HKLM\..\RunServices: [ccEvtMgr] "c:\Program Files\Common Files\Symantec Shared\ccEvtMgr.exe"
O4 - HKLM\..\RunServices: [ccSetMgr] "c:\Program Files\Common Files\Symantec Shared\ccSetMgr.exe"
O9 - Extra button: Real.com (HKLM)
O9 - Extra button: Dell Home (HKCU)
O12 - Plugin for .wav: C:\Program Files\Netscape\Communicator\Program\PLUGINS\npaudio.dll
O12 - Plugin for .mid: C:\Program Files\Netscape\Communicator\Program\PLUGINS\npaudio.dll
O12 - Plugin for .swf: C:\Program Files\Netscape\Communicator\Program\PLUGINS\npswf32.dll
O16 - DPF: {D27CDB6E-AE6D-11CF-96B8-444553540000} (Shockwave Flash Object) -
http://active.macromedia.com/flash2/cabs/swflash.cab
O16 - DPF: {4A3CF76B-EC7A-405D-A67D-8DC6B52AB35B} (QDiagAOLCCUpdateObj Class) -
http://aolcc.aol.com/computercheckup/qdiagcc.cab
O16 - DPF: {74D05D43-3236-11D4-BDCD-00C04F9A3B61} (HouseCall Control) -
http://a840.g.akamai.net/7/840/537/2004033001/housecall.antivirus.com/housecall/xscan53.cab
My questions for you:
1) I am thinking I should delete the following from the Hijack file, what do you think?
R1 - HKCU\Software\Microsoft\Windows\CurrentVersion\Internet Settings,ProxyOverride = 127.0.0.1
R3 - Default URLSearchHook is missing
2) When I press control+alt+del to see what programs are running, explorer is not one of them and it is not present in the list in the SCU. I am pretty worried by this, is it a major problem?
3) The exact error I get at shutdown/restart is an "illegal operation" and when I hit the details button I get that Explorer caused an invalid page fault in module Kernel32.DLL at 017f:bff87f00. (Not really a question just more details in case it helps.
4) Every time while booting up now, I get the message "Wait while Setup updates your configuration files". Could the same problem be causing this?
5) While clearing my cookies there was one file the system would not let me delete: index.txt. Should I go into safe mode and delete it?
Once again, thank you for your help. I really appreciate it. Sorry for so many questions, this whole this just has me a little paniced

Thanks again!!!!