Well...I don't have a solution, but I can tell you that...if malware is capable of corrupting, modifying, or otherwise removing key files (and it is), then removing malware after-the-fact may not necessarily result in a system being restored to proper functioning.
Assuming that the system IS clean and that you now have proper defenses updated, installed, and active...I suggest running a repair install of XP. That would seem to me to be the best route to pursue, other persons in the forum probably have different ideas.
How to perform a repair installation of Windows XP if Internet Explorer 7 is installed - http://support.microsoft.com/?kbid=917964
FWIW: Never, never turn off your firewall while you are connected to the Internet. I don't know where you obtained that particular strategy but...don't do it.
The long way of attempting to troubleshoot all this would begin with my asking you to check Event Viewer for errors indicated.
What is the Event Viewer, and Should I Care - Ask Leo! - http://ask-leo.com/what_is_the_event_viewe...uld_i_care.html