Checking out the system, I found that all the desktop icons had vanished, along with all the files in My Documents, Start Menu, etc. Of course, the files were all set to hidden, so it was just a matter of removing the malware.
Just as I was about to run Sophos - which had been disabled - I was alarmed to see a very worrisome popup on the Taskbar warning me of bad disk sectors & I should restart my computer immediately. I rebooted & ran HP utilities on startup to check the disk. No problems were found. I returned to Windows and ran chkdsk, again found no problems.
I rebooted into safemode & ran Rkill, followed by scans with Sophos and Malwarebytes multiple times, regularly finding various infected items on Tuesday & Wednesday. Yesterday I installed and ran Spybot Search & Destroy, which finally caught the XP Recovery malware. I removed it, and scanned again with Sophos and Malwareybtes. Nothing more was found and I saw this as a good sign.
This morning, however, I decided to run Malwarebytes once more. As it was running, another item was caught and placed into quarantine by Sophos - Troj/ExpJS-BO.
Please Help! With the exception of the Spybot removal of XP Recover, I have attached all the logs collected before the latest exploit was discovered.