...been there, done that. Good luck. Note that Best Buy's Geek Squad is charging $199 in store, $249 in home/office for what they call "Advanced Diagnostic & Repair" to remove spyware and viruses, so you're not too far off.
Well I spent most of the day saturday working on that computer and am up to 10 hrs total got it working and in decent shape. But when I would connect to the internet would get about 6 new connections that I didn't like seeing and couldn't think of a legitimate reason for the computer to be making them. So it's off to the format factory for them yesterday i spent like 3 hrs backing up these people have so much music and in redundant directorys so i just backed it all up.