Laptop connects to internet via router, desktop does not

I'm trying to remotely diagnose a network issue for my extremely technophobic
sister-in-law, and at a loss at this point for what to do next. Read on for
details, any suggestions welcome.

Shortly after a friend came over to look at her computer in response to a
flurry of "virus warnings" that turned out to be pop-ups and installed avg,
zonealarm free and spybot, her desktop stopped connecting to the internet.
Her laptop continued to get a signal.

Working on a hunch that perhaps her router had gone wonky and the wireless
connection was actually from a neighbor, I had her check her connection, and
she was in fact on her router with a good strong signal and could access web
freely.

I had her go through the standard steps to diagnose a broken connection ...
check all connections, power down pc, unplug cable modem and router, wait,
recable and restart. I had her flush her dns cache, renew the ip address,
etc. Nothing worked. We also checked her network connections in xp to make
sure that tcp/ip was running and nothing looked amiss.

She was unable to reach her router from the desktop using any of address I'd
expect it to be at (and we didn't get to check it from the laptop because I
had her disconnect cables after going through the resets and flushes with no
success, and she can't get back to where the cable is located to reconnect).
But we could access the modem admin page, which resolved to the default
gateway address. Nevertheless, she was not able to get past a login screen
for which she claims she does not have credentials.

She was never able to test the modem directly connected to the laptop
because she can't access the disconnected cable or is afraid to do so, one,
so she's stuck without internet access and talking to a tech service guy who
suggests he take her computter, wipe and reinstall at a cost of $60 an hour.
I know there's a simpler solution to her problem than that.

Can anyone help?