system infection

I am  currently fighting something on my laptop, running windows xp that has me baffled.  My neice has been  using this machine for a while and didn't bother telling me that the live update, an older version, had expired.  It became infected with mass quantities of trojans, popup generators, spyware, malware, ... the works. 

 

Normally I would have put the hard drive in another system and scanned/cleaned it there but thats a little difficult with a laptop.  I scanned it with another system with NAV, spybot, and Adaware.  Afterwards, I reloaded all of the above onto the system and scanned it again, removing yet more goodies.  I have even used the online scanners at symantec.com to scan the system and it checks out beautifully.

 

The system refuses to acknowledge any symantec/norton cd.  Internet explorer locks up when trying to go to any security site, symantec, McAfee, etc.  All other sites and discs work fine.  In safe mode the system will load the discs and IE will go to any site without question. 

 

Obviously there is something at work still in this system.  Any suggestions on what to look for or a course of action to pursue?  I'd rather not reload this system from scratch if I can avoid it.  Laptops can be such a joy to work on.