Can't access web sites

A friend had b*u*g*b*e*a*r. Also some **** sites which seem to have attached themselves to Google. I've helped him delete and clean up his Win98SE system (IE5). Since then he has been unable to navigate to any web site. When entering an URL and attempting to go to that address, there is a brief message in the status bar starting with something like "src://c:/windows/system/??? (it's about all we can decipher to date as it disappears so quickly). Then page not found.
I've searched the registry and found "about URLs" in software/ms/internet explorer. The entries are similar, but don't point to /windows/system. I've also looked in 'hosts' & 'lmhosts' but nothing is amiss there. Also checked win & system.ini. Repaired IE5, & installed IE6. My impression is that either a critical file is missing (but what?) or the system has been hijacked.
Now I'm at wits end.
Can any more experienced guru kindly help us out? (Short of reformatting c

 

Thats a pretty nasty virus. It sounds like you didnt get it all. See if this helps.