Virus problem?

After turning on a friends computer it loaded up XP no problem but then a
pop-up comes up with an IE window (even tho default browser is Firefox) and an error message comes up over the IE window saying that "the address cannot be located" or words to that effect.

When I tried to close the error message, the IE window remains and another pop-up IE window comes up over it with the same error message over that. This seems to go on forever, with a (presumabely infinite) number of pop-up IE windows, all the same.

The only way I could get rid of all these pop-ups is to hold Alt-F4 down and
then, after a sequence of another half dozen of these pop-ups, they all delete and disappear.

The only virus program running was Avira. I did a scan with it and it didn't
show anything but then I noticed that the virus database hadn't been updated for about 3 months.

I tried updating the virus database over the internet but it couldn't access
the update sites, even though Firefox seemed to work Ok.

I deleted Avira and loaded Eset to do a thorough scan but found that all communications seemed to have frozen. Firefox runs but can't contact any
sites. Eset can't update it's virus vault and Spybot, which I also tried
loading, couldn't download it's necessary files.

When I look at the network connection in the Control Panel it says it is connected ok but the "packets up" freezes on about 70 and the packets down freezes on about 5.

I tried loading the latest AVG Free off a flash drive with the computer in Safe Mode but AVG failed to load.

Can anybody please help me?