Hi njensen, and welcome to BC forums.
If your AVG Free can't remove it, you should use something, that can remove by rebooting. That should be a Malwarebytes' Anti-Malware
, or an a-squared
(can get some false positives).
Hope this helps,
P.S. If you're using AVG Free, it's pretty confusing how it can detect a rootkit, becuase such ability was disabled from a version 8 or so.
P.P.S. For not catching such sh*t, you should get a good anti-virus (with anti-spyware) with a real time protection from rootkits, etc.. These could be (Google it) Avira Free, avast! Home, etc.. If you have a genuine OS, you can get Microsoft SE (Microsoft Security Essentials). That should do.
P.P.P.S. As a protection from hackers, you could use (Google it as well) Outpost firewall, from Agnitum (Free version). If you install it, place an auto-learn mode (1-day, 1-hour or 1-week).
P.P.P.P.S. You really should find your OS disc(s). Having them is very handy...