I would opt for the computer wipe or let someone with some knowledge in computers clean it for you.
also in the future it might be a good idea to do some of the following things.
use firefox or opera. These are alternative browsers that also run on windows and offer much beter standard security then IE does. (IE is short for Internet Explorer, the browser that ships with windows)
firefox link opera link
I would opt for firefox, since it's safe, fast and doesn't have a banner like opera.
(Opera is commercial software, firefox is opensource)
If for some reason you don't want to use anything else then IE or you don't have the security clearance on your computer to install firefox or opera. (or whatever)
Then you should make IE a bit more secure. To do this you need to look under options or preferences of the browser, somewhere there it will list a few zones.
Now you want to put the internet zone on it's highest security setting.
I'm pretty sure this will break all sorts of woozy effects on all sorts of sites, but at least you will be safe.
also copy this file
hosts.txt
into one of the following directories depending on your version of windows. (also useful for other Os'es since the list is pretty much filled with al sorts of sites i never need to visit)
Windows XP = C:\WINDOWS\SYSTEM32\DRIVERS\ETC
Windows 2K = C:\WINNT\SYSTEM32\DRIVERS\ETC
Win 98\ME = C:\WINDOWS
If you are uncertain which version you have, simply copy the file to each of those directories.
every time you want to go to a site. Like say guildwarsguru.com, the computer actually first looks up what IP number that name has. (because the internet works with IP numbers and not names)
The computer does this by querying a server called a DNS (Domain Name Server) however it also looks for a file called hosts on your own computer.
And if the hosts file has a rule about a certain website name, it will use that value.
So if for instance the ip of guildwarsguru.com was 67.15.63.192 but your hosts file listed it as 127.0.0.1 then your browser (and all other software) would try to find the guildwarsguru site at 127.0.0.1. And off course will not find it.
Now the file above lists a very very very long list of sitenames that only have spyware and commercials and viruses or whatever. (the crap of the crop) and redirects it to 127.0.0.1.
127.0.0.1 btw is a set IP in computer land, it is always your own computer.
more information about this file can be found here
hosts file guide page
but really if you can just use another browser.
And while where at that topic, you might also want to switch email client.
As you probably have already heard, viruses and trojans via email are hot, and outlook is there prime target for abuse. So switching to a alternative e-mail client gives you a great way to protect yourself against viruses via email.
Take for instance Thunderbird (from the same people as firefox)
It's a opensource mail client that doesn't have all the security bugs that outlook has and has some nice features on top of that.
thunderbird link
Now i also wanted to write something about switching away from windows all together but i'm getting a bit tired of trying to remember how windows worked, so i will simply conclude by saying that you should probably be using linux and the gnome desktop.
linux link
The only down side is that not all games work on linux, but there already is a slight trend of also offering games for linux. (doom3,quake3,ut2k4,neverwinter nights,some more)
There are also some programs that don't have a equivalent on linux.
there is at the moment no full featured flash editor for linux. (there is a basic one though)
there is no graphical printing/publishing suite. (quark express, photshop CMYK stuff) (although there are some programs on the rise, but there still starting up)
for the rest everything is accounted for and then some more that simply isn't found on windows.
www.gnomefiles.com has a pretty good user friendly list of whats available for the gnome desktop.