I don't see anything suspicious here.
It appears that your Norton Internet Security is outdated, so most probably you are still using a trial version. I suggest you uninstall it and replace it with another Antivirus, because currently nothing is preventing malware here.
Also uninstall Norton LiveUpdate.
For your Internet Explorer issue, this is most probably caused by one of the toolbars you have installed, so to figure out...
To run Internet Explorer 7 without Add-ons, rightclick the IE7 icon present on your desktop and select: "Start without Add-ons"
In case that option is not present there, go to start > All Programs > Accessories > System Tools > Internet Explorer (No Add-ons)
This will start Internet Explorer 7 in the No-Add ons mode. This means that toolbars and Browser Helper Objects will be disabled.
So if your problem is solved when you use the No-Add on mode, this means that one of your Add ons is causing this.
Let me know if your problem is solved in the No-Add on mode.