Solved: Lost c drive after AVG late update

Thanks in advance guys.
I updated my AVG to 8 but was late doing it, I had a lot of trojans and spies but now my 'C' drive is not accessable, the start menu and desktop have lost a lot of program ikons, there is a virus alert in the time window which I can't remove and the wallpaper has turned white.
When I go> search > all files and folders, the 'look in' box has :Local Hard drives (), if I put in a search > *.* It returns a list of files and folders in either the C:\My Documents or C:\Documents and Settings folders, when I do the same search with 'Look In (C it returns the message: 'Local Hard Drives (C' is not a valid folder'.
I have searched this forum and found a similar problem and what seemed to be a solution from rob3394 but I can't start my computer in safe mode by tapping the f8 during start up.

 

A friend has just been round an fixed my problem but created another one which is: I now have permanently on the desktop Internet Explorer box similar to the one when you drill down from My Computer. The box has nothing in it but the taskbar/toolbar are off the screen therefore I can't shut it down, I've tried creating another folder and copying everything from the original so that the original can be deleted and hopefully get rid of the problem but it won't let me copy all the files.
I will also post this problem as a seperate issue.