W32.Bagz.E@mm is a spam worm. It uses its SMTP engine to send emails. 1. Creates the following copies of itself: * %System%\rpc32.exe * %System%\run32.exe * %system%\sysboot.doc (many spaces) .exe 2. Infects the HOSTS file. Blocks access to antiviral sites and to Microsoft update. 3. Sends e-mails.
Removal: Remove it from startup using antivirus (also check How To Remove section)Startup Optimizer. Restore the HOSTS file using antivirus (also check How To Remove section)Anti-Spyware. Stop the service and set it to disabled state. Remove files.