System Restore to a point before all this happened would have been your first move but that's disabled so can't be done.
Try running Stinger and Malwarebytes Free which are both linked in my signature, last link. The latter can be downloaded, updated and run all in 'Safe Mode with Networking' if necessary.
I have run stinger with no luck in removing this virus. I am going to attempt malewarebytes now. What I read in the virus profile said that I need to resotre my MBR, which i tried to do but my windows xp cd is a recovery disc and doesnt allow me to access the recovery console. Ive been trying to find a means of restoring the MBR without the disc, but to no avail as of yet.
MBAM can be downloaded in Safe Mode with Networking if necessary, also updated and run in that mode even.
I'm not too sure what else to suggest except perhaps download Hijackthis as per the link near the bottom of the page in the last link in my sugnature and posting its log on one of those specialist forums.
If the infection wont allow you to install anything you could try using the 'Save as' option to save the installer to your desktop and rename it in the process which might fool the malware.
Or try saving it to a removable flash drive first and installing it from there.
Malewarebytes was able to pick up additional trojan like symptons, such as registry value problems, but that is all. I have tried right click scanning the file that the Dropper virus is in, yet neither mcafee nor malewarebytes detects anyhting. Only when i run a full Mcafee scan does it find the virus. everything installs just fine, but i dont trust the Generic Dropper virus to just let it sit without it putting more junk on my computer. Sigh...
p.s. I have hijackthis and no luck there either (ive used it for about 2 years now)