AVG 2009 internet security is a good start. Do you use all its components, eg firewall, anti-virus, anti-spyware?

AVG needs its virus and spyware definitions updated often and regularly. I would set it to update automatically. It also needs to perform a full anti-virus scan once a day. The anti-spyware scan can be less often, say once a week.

Do the other computers on the network have internet access? Whether they do or not, they all need similar security, firewall, anti-virus and anti-spyware, all updated and scans performed regularly.

If any computer accesses the internet via a wireless router, make sure the highest wireless security is used, eg WPA or WPA2, and using a 'strong' password for the wireless/router access.

You also need backup anti-malware scanners, not running in the background, but used to run regular weekly scans. Utilities such as Malwarebyte's Antimalware and/or SUPERAntispyware are recommended.

As far as reinstalling software from your backups, if the backup hard drive is clear of malware, then all you can do is to try reinstalling. Software usually cannot just be 'copied' back from a backup to the system. Each software application has to be 're-installed'.

I hope that helps.