I searched on the web and some say that the culprit is a tdsserver.sys file or something associated with it.
I have windows xp sp3, avast antivirus, adaware, mbam, atf cleaner, windows malicious software removal tool.
I have ran full scans on these programs and deleted everything they have found.
These are the logs I need to post here, so hopefully somebody else has already gone through this process and know how to get rid of it

DDS (Ver_09-10-26.01) - NTFSx86
Run by HP_Administrator at 22:49:16.64 on Tue 10/27/2009
Internet Explorer: 8.0.6001.18702
Microsoft Windows XP Professional 5.1.2600.3.1252.1.1033.18.511.115 [GMT -7:00]
AV: avast! antivirus 4.8.1335 [VPS 091027-0] *On-access scanning enabled* (Updated) {7591DB91-41F0-48A3-B128-1A293FD8233D}
============== Running Processes ===============
C:\WINDOWS\system32\svchost -k DcomLaunch
svchost.exe
C:\WINDOWS\System32\svchost.exe -k netsvcs
svchost.exe
svchost.exe
C:\WINDOWS\Explorer.EXE
C:\Program Files\Alwil Software\Avast4\aswUpdSv.exe
C:\Program Files\Lavasoft\Ad-Aware\AAWService.exe
C:\Program Files\Alwil Software\Avast4\ashServ.exe
C:\WINDOWS\system32\spoolsv.exe
svchost.exe
C:\WINDOWS\arservice.exe
C:\WINDOWS\eHome\ehRecvr.exe
C:\WINDOWS\eHome\ehSched.exe
C:\Program Files\Java\jre6\bin\jqs.exe
C:\Program Files\Common Files\LightScribe\LSSrvc.exe
C:\Program Files\Common Files\Motive\McciCMService.exe
C:\WINDOWS\system32\nvsvc32.exe
C:\WINDOWS\system32\HPZipm12.exe
svchost.exe
C:\WINDOWS\system32\svchost.exe -k imgsvc
C:\WINDOWS\system32\tservice.exe
C:\Program Files\Common Files\Pure Networks Shared\Platform\nmsrvc.exe
C:\Program Files\Alwil Software\Avast4\ashMaiSv.exe
C:\Program Files\Alwil Software\Avast4\ashWebSv.exe
C:\WINDOWS\system32\dllhost.exe
C:\WINDOWS\ARPWRMSG.EXE
C:\windows\system\hpsysdrv.exe
C:\program files\hp\HPMShellAdjust\HPMShellAdjust.exe
C:\WINDOWS\SOUNDMAN.EXE
C:\Program Files\Hp\HP Software Update\HPWuSchd2.exe
C:\PROGRA~1\ALWILS~1\Avast4\ashDisp.exe
C:\WINDOWS\system32\LVCOMSX.EXE
C:\WINDOWS\SYSTEM32\AREVENT.EXE
C:\HP\KBD\KBD.EXE
C:\WINDOWS\ehome\ehtray.exe
C:\Program Files\Verizon\McciTrayApp.exe
C:\Program Files\Lavasoft\Ad-Aware\AAWTray.exe
C:\Program Files\Java\jre6\bin\jusched.exe
C:\Program Files\Common Files\Pure Networks Shared\Platform\nmctxth.exe
C:\Program Files\Pure Networks\Network Magic\nmapp.exe
C:\WINDOWS\system32\ctfmon.exe
C:\Program Files\Google\GoogleToolbarNotifier\GoogleToolbarNotifier.exe
C:\WINDOWS\system32\rundll32.exe
C:\WINDOWS\eHome\ehmsas.exe
C:\WINDOWS\System32\svchost.exe -k HTTPFilter
C:\WINDOWS\system32\wuauclt.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Program Files\Internet Explorer\iexplore.exe
C:\Documents and Settings\HP_Administrator\Desktop\dds.scr
============== Pseudo HJT Report ===============
uSearch Bar = hxxp://ie.redirect.hp.com/svs/rdr?TYPE=3&tp=iesearch&locale=EN_US&c=Q405&bd=pavilion&pf=desktop&parm1=seconduser
uStart Page = hxxp://google.com/
uInternet Connection Wizard,ShellNext = hxxp://ie.redirect.hp.com/svs/rdr?TYPE=3&tp=iehome&locale=EN_US&c=Q405&bd=pavilion&pf=desktop&parm1=seconduser
BHO: AcroIEHlprObj Class: {06849e9f-c8d7-4d59-b87d-784b7d6be0b3} - c:\program files\adobe\acrobat 7.0\activex\AcroIEHelper.dll
BHO: Windows Live Sign-in Helper: {9030d464-4c02-4abf-8ecc-5164760863c6} - c:\program files\common files\microsoft shared\windows live\WindowsLiveLogin.dll
BHO: Verizon Broadband Toolbar: {a057a204-bacc-4d26-8398-26fadcf27386} - c:\progra~1\verizo~1\VERIZO~1.DLL
BHO: Google Toolbar Helper: {aa58ed58-01dd-4d91-8333-cf10577473f7} - c:\program files\google\google toolbar\GoogleToolbar_32.dll
BHO: Google Toolbar Notifier BHO: {af69de43-7d58-4638-b6fa-ce66b5ad205d} - c:\program files\google\googletoolbarnotifier\5.3.4501.1418\swg.dll
BHO: Google Dictionary Compression sdch: {c84d72fe-e17d-4195-bb24-76c02e2e7c4e} - c:\program files\google\google toolbar\component\fastsearch_B7C5AC242193BB3E.dll
BHO: Java Plug-In 2 SSV Helper: {dbc80044-a445-435b-bc74-9c25c1c588a9} - c:\program files\java\jre6\bin\jp2ssv.dll
BHO: JQSIEStartDetectorImpl Class: {e7e6f031-17ce-4c07-bc86-eabfe594f69c} - c:\program files\java\jre6\lib\deploy\jqs\ie\jqs_plugin.dll
TB: Verizon Broadband Toolbar: {a057a204-bacc-4d26-8398-26fadcf27386} - c:\progra~1\verizo~1\VERIZO~1.DLL
TB: Google Toolbar: {2318c2b1-4965-11d4-9b18-009027a5cd4f} - c:\program files\google\google toolbar\GoogleToolbar_32.dll
TB: {42CDD1BF-3FFB-4238-8AD1-7859DF00B1D6} - No File
uRun: [ctfmon.exe] c:\windows\system32\ctfmon.exe
uRun: [swg] "c:\program files\google\googletoolbarnotifier\GoogleToolbarNotifier.exe"
mRun: [ftutil2] rundll32.exe ftutil2.dll,SetWriteCacheMode
mRun: [AlwaysReady Power Message APP] ARPWRMSG.EXE
mRun: [hpsysdrv] c:\windows\system\hpsysdrv.exe
mRun: [High Definition Audio Property Page Shortcut] HDAShCut.exe
mRun: [NvCplDaemon] RUNDLL32.EXE c:\windows\system32\NvCpl.dll,NvStartup
mRun: [nwiz] nwiz.exe /installquiet /keeploaded /nodetect
mRun: [HPMShellAdjust] c:\program files\hp\hpmshelladjust\HPMShellAdjust.exe
mRun: [Recguard] c:\windows\sminst\RECGUARD.EXE
mRun: [SoundMan] SOUNDMAN.EXE
mRun: [AlcWzrd] ALCWZRD.EXE
mRun: [HP Software Update] c:\program files\hp\hp software update\HPWuSchd2.exe
mRun: [avast!] c:\progra~1\alwils~1\avast4\ashDisp.exe
mRun: [LVCOMSX] c:\windows\system32\LVCOMSX.EXE
mRun: [LogitechVideoRepair] c:\program files\logitech\video\ISStart.exe
mRun: [ARMsg] c:\windows\system32\AREVENT.EXE
mRun: [KBD] c:\hp\kbd\KBD.EXE
mRun: [Google Quick Search Box] "c:\program files\google\quick search box\GoogleQuickSearchBox.exe" /autorun
mRun: [ehTray] c:\windows\ehome\ehtray.exe
mRun: [Verizon_McciTrayApp] "c:\program files\verizon\McciTrayApp.exe"
mRun: [Ad-Watch] c:\program files\lavasoft\ad-aware\AAWTray.exe
mRun: [SunJavaUpdateSched] "c:\program files\java\jre6\bin\jusched.exe"
mRun: [<NO NAME>]
mRun: [QuickTime Task] "c:\program files\quicktime\qttask.exe" -atboottime
mRun: [nmctxth] "c:\program files\common files\pure networks shared\platform\nmctxth.exe"
mRun: [nmapp] "c:\program files\pure networks\network magic\nmapp.exe" -autorun -nosplash
mPolicies-explorer: NoSMBalloonTip = 1 (0x1)
IE: {E2D4D26B-0180-43a4-B05F-462D6D54C789} - c:\windows\pchealth\helpctr\vendors\cn=hewlett-packard,l=cupertino,s=ca,c=us\iebutton\support.htm
IE: {e2e2dd38-d088-4134-82b7-f2ba38496583} - %windir%\Network Diagnostic\xpnetdiag.exe
IE: {FB5F1910-F110-11d2-BB9E-00C04F795683} - c:\program files\messenger\msmsgs.exe
DPF: {01113300-3E00-11D2-8470-0060089874ED} - hxxps://activatemydsl.verizon.net/sdcCommon/download/DSL/Verizon%20High%20Speed%20Internet%20Installer.cab
DPF: {0742B9EF-8C83-41CA-BFBA-830A59E23533} - hxxps://support.microsoft.com/Dcode/ActiveX/MSDcode.cab
DPF: {17492023-C23A-453E-A040-C7C580BBF700} - hxxp://download.microsoft.com/download/F/D/9/FD9E437D-5BC8-4264-A093-DFA2C39D197E/LegitCheckControl.cab
DPF: {67DABFBF-D0AB-41FA-9C46-CC0F21721616} - hxxp://download.divx.com/player/DivXBrowserPlugin.cab
DPF: {8AD9C840-044E-11D1-B3E9-00805F499D93} - hxxp://java.sun.com/update/1.6.0/jinstall-1_6_0_14-windows-i586.cab
DPF: {CAFEEFAC-0016-0000-0014-ABCDEFFEDCBA} - hxxp://java.sun.com/update/1.6.0/jinstall-1_6_0_14-windows-i586.cab
DPF: {CAFEEFAC-FFFF-FFFF-FFFF-ABCDEFFEDCBA} - hxxp://java.sun.com/update/1.6.0/jinstall-1_6_0_14-windows-i586.cab
DPF: {D27CDB6E-AE6D-11CF-96B8-444553540000} - hxxp://fpdownload2.macromedia.com/get/shockwave/cabs/flash/swflash.cab
DPF: {E06E2E99-0AA1-11D4-ABA6-0060082AA75C} -
Filter: text/html - {957cc0bc-9360-45d3-941e-182c4348e346} -
Handler: pure-go - {4746C79A-2042-4332-8650-48966E44ABA8} - c:\program files\common files\pure networks shared\platform\puresp4.dll
============= SERVICES / DRIVERS ===============
R0 dontgo;Promise Removable Disk Control Driver;c:\windows\system32\drivers\dontgo.sys [2004-6-29 7680]
R0 Lbd;Lbd;c:\windows\system32\drivers\Lbd.sys [2009-6-4 64160]
R1 aswSP;avast! Self Protection;c:\windows\system32\drivers\aswSP.sys [2009-1-11 114768]
R2 aswFsBlk;aswFsBlk;c:\windows\system32\drivers\aswFsBlk.sys [2009-1-11 20560]
R2 Lavasoft Ad-Aware Service;Lavasoft Ad-Aware Service;c:\program files\lavasoft\ad-aware\AAWService.exe [2009-3-9 1028432]
R2 TService;DEC Front Panel Display Service;c:\windows\system32\tservice.exe [2009-1-20 86016]
R3 ATIDDCXX;ATI DTV Wonder Digital BDA Capture Device;c:\windows\system32\drivers\atiddcxx.sys [2006-5-3 10112]
R3 ATIDTUDD;ATI DTV Wonder Digital Tuner Device;c:\windows\system32\drivers\atidtuxx.sys [2006-5-3 44416]
R3 ATIDVCXX;ATI DTV Wonder Digital AV Capture Device;c:\windows\system32\drivers\atidvcxx.sys [2006-5-3 201216]
S2 gupdate1c98c695a464d42;Google Update Service (gupdate1c98c695a464d42);c:\program files\google\update\GoogleUpdate.exe [2009-2-11 133104]
S3 SydexFDD;Sydex Diskette Driver;c:\windows\system32\drivers\SYDEXFDD.SYS [2009-5-29 13359]
S3 WN5401;Liteon Wireless LAN PCI 802.11 a/b/g adapter WN5401A;c:\windows\system32\drivers\wn5401.sys [2006-5-3 449920]
=============== Created Last 30 ================
2009-10-18 20:33:56 0 d-----w- C:\freethewads
2009-10-16 15:20:26 2189056 ----a-w- c:\windows\system32\dllcache\ntoskrnl.exe
2009-10-16 15:20:26 2145280 ----a-w- c:\windows\system32\ntoskrnl.exe
2009-10-16 15:20:26 2145280 ----a-w- c:\windows\system32\dllcache\ntkrnlmp.exe
2009-10-16 15:20:26 2066048 ----a-w- c:\windows\system32\dllcache\ntkrnlpa.exe
2009-10-16 15:20:26 2023936 ----a-w- c:\windows\system32\ntkrnlpa.exe
2009-10-16 15:20:26 2023936 ----a-w- c:\windows\system32\dllcache\ntkrpamp.exe
==================== Find3M ====================
2009-10-04 21:10:45 15688 ----a-w- c:\windows\system32\lsdelete.exe
2009-09-11 14:18:39 136192 ----a-w- c:\windows\system32\msv1_0.dll
2009-09-11 14:18:39 136192 ------w- c:\windows\system32\dllcache\msv1_0.dll
2009-09-10 21:54:06 38224 ----a-w- c:\windows\system32\drivers\mbamswissarmy.sys
2009-09-10 21:53:50 19160 ----a-w- c:\windows\system32\drivers\mbam.sys
2009-09-04 21:03:36 58880 ----a-w- c:\windows\system32\msasn1.dll
2009-09-04 21:03:36 58880 ------w- c:\windows\system32\dllcache\msasn1.dll
2009-08-28 10:35:52 173056 ----a-w- c:\windows\system32\dllcache\ie4uinit.exe
2009-08-27 01:49:13 520192 ----a-w- c:\windows\system32\pl2_screensaver.scr
2009-08-26 08:00:21 247326 ----a-w- c:\windows\system32\strmdll.dll
2009-08-26 08:00:21 247326 ----a-w- c:\windows\system32\dllcache\strmdll.dll
2009-08-07 02:24:18 327896 ----a-w- c:\windows\system32\dllcache\wucltui.dll
2009-08-07 02:24:18 209632 ----a-w- c:\windows\system32\dllcache\wuweb.dll
2009-08-07 02:24:10 35552 ----a-w- c:\windows\system32\dllcache\wups.dll
2009-08-07 02:24:06 53472 ----a-w- c:\windows\system32\dllcache\wuauclt.exe
2009-08-07 02:24:04 96480 ----a-w- c:\windows\system32\dllcache\cdm.dll
2009-08-07 02:23:54 575704 ----a-w- c:\windows\system32\dllcache\wuapi.dll
2009-08-07 02:23:46 274288 ----a-w- c:\windows\system32\mucltui.dll
2009-08-07 02:23:46 215920 ----a-w- c:\windows\system32\muweb.dll
2009-08-07 02:23:46 1929952 ----a-w- c:\windows\system32\dllcache\wuaueng.dll
2009-08-05 09:01:48 204800 ----a-w- c:\windows\system32\mswebdvd.dll
2009-08-05 09:01:48 204800 ------w- c:\windows\system32\dllcache\mswebdvd.dll
2009-01-12 19:18:24 32768 --sha-w- c:\windows\system32\config\systemprofile\local settings\history\history.ie5\mshist012009010520090112\index.dat
2009-01-12 19:18:24 32768 --sha-w- c:\windows\system32\config\systemprofile\local settings\history\history.ie5\mshist012009011220090113\index.dat
============= FINISH: 22:51:31.92 ===============
ROOTREPEAL © AD, 2007-2009
==================================================
Scan Start Time: 2009/10/27 22:57
Program Version: Version 1.3.5.0
Windows Version: Windows XP Media Center Edition SP3
==================================================
Drivers
-------------------
Name: dump_atapi.sys
Image Path: C:\WINDOWS\System32\Drivers\dump_atapi.sys
Address: 0xF249E000 Size: 98304 File Visible: No Signed: -
Status: -
Name: dump_WMILIB.SYS
Image Path: C:\WINDOWS\System32\Drivers\dump_WMILIB.SYS
Address: 0xF8B11000 Size: 8192 File Visible: No Signed: -
Status: -
Name: rootrepeal.sys
Image Path: C:\WINDOWS\system32\drivers\rootrepeal.sys
Address: 0xB8E42000 Size: 49152 File Visible: No Signed: -
Status: -
Hidden/Locked Files
-------------------
Path: C:\hiberfil.sys
Status: Locked to the Windows API!
Path: c:\documents and settings\hp_administrator\local settings\temp\~df4ef6.tmp
Status: Allocation size mismatch (API: 16384, Raw: 0)
Path: c:\documents and settings\hp_administrator\local settings\temp\~df59fc.tmp
Status: Allocation size mismatch (API: 16384, Raw: 0)
Path: c:\documents and settings\hp_administrator\local settings\temp\~df5ce2.tmp
Status: Allocation size mismatch (API: 327680, Raw: 16384)
Path: c:\documents and settings\hp_administrator\local settings\temp\~dff5f3.tmp
Status: Allocation size mismatch (API: 16384, Raw: 0)
Path: c:\documents and settings\all users\application data\pure networks\log\logfile.nmsrvc_exe.txt
Status: Size mismatch (API: 65016, Raw: 64748)
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\TelerikCommon.cdf-ms
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\2DF FreePlay Client.exe.cdf-ms
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\2DF FreePlay Client.exe.manifest
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\Damdai.Forms.cdf-ms
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\Damdai.Forms.manifest
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\Damdai.cdf-ms
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\Damdai.manifest
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\ICSharpCode.SharpZipLib.cdf-ms
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\ICSharpCode.SharpZipLib.manifest
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\TelerikCommon.manifest
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\Telerik.WinControls.cdf-ms
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\Telerik.WinControls.manifest
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\Telerik.WinControls.UI.cdf-ms
Status: Locked to the Windows API!
Path: C:\Documents and Settings\HP_Administrator\Local Settings\Apps\2.0\0RC7JEH9.097\K83DKGXB.9OG\manifests\Telerik.WinControls.UI.manifest
Status: Locked to the Windows API!
SSDT
-------------------
#: 025 Function Name: NtClose
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250a6b8
#: 041 Function Name: NtCreateKey
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250a574
#: 065 Function Name: NtDeleteValueKey
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250aa52
#: 068 Function Name: NtDuplicateObject
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250a14c
#: 119 Function Name: NtOpenKey
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250a64e
#: 122 Function Name: NtOpenProcess
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250a08c
#: 128 Function Name: NtOpenThread
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250a0f0
#: 177 Function Name: NtQueryValueKey
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250a76e
#: 204 Function Name: NtRestoreKey
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250a72e
#: 247 Function Name: NtSetValueKey
Status: Hooked by "C:\WINDOWS\System32\Drivers\aswSP.SYS" at address 0xf250a8ae
Stealth Objects
-------------------
Object: Hidden Module [Name: tdlcmd.dll]
Process: svchost.exe (PID: 988) Address: 0x10000000 Size: 24576
Object: Hidden Module [Name: tdlwsp.dll]
Process: Explorer.EXE (PID: 1692) Address: 0x10000000 Size: 28672
Object: Hidden Module [Name: tdlwsp.dll]
Process: iexplore.exe (PID: 2980) Address: 0x10000000 Size: 28672
Object: Hidden Module [Name: tdlwsp.dll]
Process: iexplore.exe (PID: 1708) Address: 0x10000000 Size: 28672
Object: Hidden Module [Name: tdlwsp.dll]
Process: iexplore.exe (PID: 1948) Address: 0x10000000 Size: 28672
==EOF==