It would appear to be malware from what I can gather from a Google search. Unfortunately of the type that eludes any antivirus application.
The first thing to try is to restart the laptop and try to get into "Safe Mode" by tapping F8 repeatedly while booting up.
Once there go to your Start Orb > All Programs > Accessories > System Tools > System Restore and see if you can start it up and get it to send you back to a time before all this started.
If successful you would have to update Windows and McAfee...and anything else that's time-sensitive immediately afterwards.
You would also have to temporarily disable System Restore in order to wipe the infected restore point.
In order to help you further I need more details - what is the operating system and service pack please?
Thanks for your reply.
I have Vista with Service Pack 2 installed.
Did systemn restore and so far - so good!
How do I disable system restore?
And what would be the best way to ensure the computer is now clean?
That's great. The simplest solution is sometimes the best and this particular one can get people out of many problems.
To temporarily disable System Restore right-click 'Computer' on your desktop or in your Start/All programs menu and select Properties.
Then select System Protection, OK any UAC system prompts.
You should see something like the following, takes a while to load sometimes, depending on how big your hard drives are:
I highlighted my C: drive as the one to uncheck, then click Apply and OK and OK any warnings.
That should do it.
Under Start > All Programs > Accessories > System Tools find the item Disk Cleanup and clean out your system of unwanted stuff that way. Again OK any prompts.
Afterwards make sure you update everything, including McAfee, and you can then re-enable System Restore..
Be very careful what you click on in future. I have Siteadvisor montioring my Internet but I also have WoT as a backup, a combo which I find works well to stop me clicking anything untoward.
Thanks so much again for the detailed instructions and all your help.
I hope it solved it....
I hope so. Give it a day and let me know.