Inactive Multiple Computer Problems - 8 Steps completed

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I have done all 8 steps, but still the problem persists if not worsen

Here are my computer problems:

- Restarts without warning (sometimes)
- When I try scanning with Avira it sees all .EXE files as viruses
- Can't access Task Manager
- Low hard disk memory even though I have only consumed around half of my memory, and as I type right now my memory went down by another 100mb
- very laggy even when I only use an excel file

Well these are the major problems

When I tried installing Avast (since my current anti virus seems useless) it automatically stops.

My computer specs:

Windows XP SP2
Pentium 4 3.0 GHz (office PC really old)
 

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Not good news- you have a Sality virus infection: This is the malware that exploits the .lnk vulnerability.

Sality is a family of file infecting viruses that spread by infecting exe and scr files. The virus also includes an autorun worm component that allows it to spread to any removable or discoverable drive. In addition, Sality includes a downloader trojan component that installs additional malware via the Web

It then creates and starts a service to load the driver. The driver blocks access to a variety of security software vendor web sites.The virus then disables security software services and ends security software processes. It also disables registry editing and the task manager.

http://www.symantec.com/connect/blogs/all-one-malware-overview-sality

Windows fails to correctly parse shortcut files, identified by the ".lnk" extension. The flaw has been exploited most frequently using USB flash drives. By crafting a malicious .lnk file, hackers can hijack a Windows PC with little user interaction: All that's necessary is that the user views the contents of the USB drive with a file manager like Windows Explorer.

Tests showed that the exploit works even when AutoRun and AutoPlay -- two functions that have previously been used by attackers to commandeer PCs using infected flash drives -- are disabled. The rootkit also bypasses all security mechanisms in Windows, including the User Account Control (UAC) prompts in Vista and Windows 7, ...
Worm is named Win32/Stuxnet.A.

Because of these actions, We recommend you do a reformat/reinstall. Attempts to clean this virus to include the backdoor capability usually fail.

You will find excellent reformat/reinstall instructions here:
http://www.tech-101.com/tutorials/356-tutorial-windows-install-repair-xp-vista.html
 
Wow, what a virus. Is there anyway that I can be able to back up my files safely? Is there a way to prevent such an infection again after I reformat?
 
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