In all my years freeing people's computers from malware the usual answer is what Generator said. The most likely outcome is a cracked operating system.
Without Service Pack 2 and approx 70 further critical updates, your machine will be regularly infected with malware.
NEVER install SP2 on a suspect infected machine (although I appreciate you can't do this at the moment anyway). SP2 won't install properly on a compromised machine and the user will be left in a worse state.
My advice? Run the validation tool from Microsoft first and foremost .....
Download MGADiag.exe to your desktop from here …..
http://go.microsoft.com/fwlink/?linkid=52012
Double-click MGADiag.exe and click Continue in the bottom right of the window to run the tool. Click the [Copy] button to copy the info to your clipboard. Then come back here and paste the info in your next reply.
If your Operating System isn't genuine your course of action is simple. You'll have to bite the bullet and buy yourself a legit copy of XP. You can pick them up from online stores for as little as £50-60 these days.
OJ