I removed the hard disk from the laptop and installed it into a spare machine I have and ran a full scan of malwarebytes. The scan did not freeze; I have attached the log malwarebytes has made called malwarebytes scan log 1 from spare computer, the biggest thing that stood out was userinit.exe was infected (Quarantined and deleted successfully). Repaired that by extracting userinit.exe from my xp pro installation CD in a customized BartPe command Prompt. After repairing userinit.exe I checked the registry to confirm that userinit.exe registry file is pointing to the correct location.
Then i reinstall laptop Hard disk drive back into my laptop and re ran malwarebytes full scan, did not freeze ((good sign)Log also attached called Malwarebytes scan log 2). This scan also found userinit.exe registry was infected repaired registry value in customised BartPe. Then I Ran Spybot, after a few hours Spybot froze (Running bot-check (1289774/1289774: Please wait ............)). I Restarted laptop and started a AVG 8.5 (Free) scan after an hour, AVG closed without finishing.
I have also attached the GMER log as requested, though could not get a DDS log due closes without opening the log.
Any help would be awesome