<<My first question is could my automatic updates been turned off by a virus, specifically the one that I had?>>
Of course it's possible. One of the basic features of some malware items...is to disable key protective facets of the system. Windows Updates, AV protection, and other protective facets are always potential targets of malware, since most (if not all) malware items are in self-defense mode when they attack a system.
Additionally...the removal of malware items may also result in system files incurring damage. Thus, even though a given malware item may have been removed, the system remains in a crippled state (unknown to most users).
Troubleshooting these possibilities is practically impossible, although there are known attempted fixes for certain known follow-on effects. Which is why some of us recommend/suggest a repair install attempt after malware removal (to replace potentially damaged/missing system files).
If that fails to bring resolution, sometimes a clean install of XP is the only logical way to deal with situations resulting from malware.
On top of all this...Automatic Updates and WUS have their own share of problems which arise which may have nothing to do with malware. To get an idea of what these encompass...try using Google and type in "automatic updates problems" and take a quick glance.
<<I would have to change a registry entry to do so and I couldn't tell from googling whether or not it is best to have the RPC set to log on as a local system account or the NT AUTHORITY\NetworkService. Do you have any idea?>>
On my systems, RPC is automatic and is logged as as a Network Service.
<<Third, if it is OK to keep it on the local system account setting, should I check the "Allow service to interact with desktop" box or leave it unchecked, as it is currently?>>
My RPC is not logged on as a local system account. I think I would run sfc /scannow or do a repair install to correct that, if I were you...I don't know if it's meaningful, but I like things to be as they should.
If you elect to leave it logged on as a local system account, I would not check the option to allow service to interact, etc.
A little more reading indicates that the way to change the logon back to what it should be...is a registry edit. I suspect that a repair install will also do it, but a registry edit is easier and quicker.
Demystifying the Windows Registry - http://www.bleepingcomputer.com/tutorials/...l74.html#backup
Be advised that any registry edit is potentially problematical...and you should back up your registry before attempting such. A good tool for such is ERUNT Registry Backup Tool - http://www.snapfiles.com/get/erunt.html
Suggested fix: http://phorums.com.au/archive/index.php/t-224061.html
Last post by Greg reflects his solution to his situation.