files & folders now 'read only'

Not sure when/what caused problem but 'restore' did not fix. For the past
few days, all files (Word & Excel) and folders now appear as 'read only',
when I click on properties. Also the Advanced Properties tab no longer allows
me to change icons, except for shortcuts, which I can still change.
Instead the only options for Advanced Properties are now Archive & Index or
Compress or Encrypt.

When I attempt to change a folder name, I get the "Cannot rename - Access is
Denied" message.

When attempting to open Excel files, the message is " 'c\Documents.x\s'
could not be found." When I ok that, it is followed by many more individual
messages in a series: " 'and.xls' could not be found",
" 'Settings\Kris.xls' could not be found", etc. for 6 -10 more message
errors.

I am running Windows XP Pro, Office 2002 Pro, with Windows Defender. I think
that the 'Properties' problems started right after running the 'XP service
Pak' (not sure which iteration but it was the one which appeared on the
Microsoft updates).

I have been attempting to undue all of the fall-out from a recent
smithfraud attack 3 weeks ago, which I thought I had accomplished. In
attempting to remove multiple trojans which followed the initial hijacking,
I added Spybot3 a week ago and today BitDefender Antivirus 2008.

I'm not sure what to do and live in an extremely rural area where taking my
computer to be 'fixed' is not an option.

thanks for taking a look at this. . . later. . .kris