Unable To Locate Component .dll Error??????

Hey guys, I'm having some problems with my XP pro Dell computer. Recently my brother downloaded some songs off of Limewire ( I know it's really bad). I have AVG free installed and it detected multiple viruses as mshypiw.dll I prompted to remove them, and it warned my system may become unstable or crash, I still clicked to remove them and after a re-boot my computer opened up to an error.

winlogon.exe - Unable To Locate Component
This application failed to start because mshypiw.dll was not found. Re-installing the application may fix this problem.

After I click OK it gives me the same error over and over again for different .exe files. Ex: lsass.exe, Services.exe

It Then opens the logon to windows screen and I can login as normal.

Then it gives me many more of the same errors, which if I enter through all of them, I can eventually get to the desktop. Then, if I try to run any program I get more of this same error, depending on which program I try to open, some will open and some will not.

I have googled for this error for hours on end and can't find an answer. I did find this KB article http://support.microsoft.com/kb/319114. Which seams to relate to my problem but the file framedyn.dll is not in my dllcache folder and I cannot get to my System setteing because of this error.

Any help is gladly appreciated, Thanks
~Cam

I downloaded and installed as you said, and the program did find and remove a bad reg key and a trojan folder, but did not solve the problem. Any other ideas?

I just fixed a computer with a similar problem. I had to backup, format and reinstall Windows.