No ordinary virus; Cleaned it, and now I can't OPEN windows?

Hi,
I need help; real bad !
I searched dozens of forum and didn"t find any similar situation..
(I'll try giving as much information as I can.. sorry about this)

I started receiving "fake infection notices' this morning that was suggesting to purchase a certain AntiSpyware.. This was not the first time I see this, known as the worm.win32.netbooster.
So far so good..

Now I went to update my AVG free, but the update didn't seem to work.
(the virus somehow blocked the avg website alone)
So I tried to go get the update manually.
From IE, every single page would redirect me somewhere else. Usually, the few times this happenned to me, what I would do is copy the url and insert it directly into the http: address bar.
Even doing this into IE didn't work; I got redirected every time.
I tried opening firefox, and my pc shut down instantly.
When it reopened, my "start menu" button didn't have the usual program tab and etc.. I just had the recent applications in there.
The ctrl-alt-delete for task manager has been disabled.

So I tried plan B ; I reinstalled my Spy Hunter 3 (has not been updated for 2 months), could not update, obviously, so I scanned my pc and this one, unlike AVG, found a few trojans. I removed them, booted the pc, and tried everything ; NOTHING had been fixed !
using firefox still resulted in rebooting; ie only redirects; cannot update antivirus; shut down for no reason, etc.

Then I tried going at a friends house, downloading the latest AVG updates on my usb key, came back, made a manual update from AVG (which worked, and was dated from today) and ran another scan.
1h55 minutes later : It's done! and this time, it seems to have found a few new spyware/trojans (even though I DID NOT connect to the internet meanwhile..and my AVG had been updated 3-4 days ago)

I've deleted everything, restarted the computer as suggested, and I DIED !!!

This is where things went nasty..

Since that restart, Windows never completely opened !
It seems to load properly, then I see my desktop background image for a few seconds (5 to 10), and then instead of showing me all the icons on the desktop, it goes back to the "login panel" or I don't know how to call this, where you have the choice of which user sessions you want in windows.
I only have one, which is Administrator.

So windows brings me there. If I click on my profile to log into windows, I hear the "Welcome" music from windows, and as soon as the sound is finished playing (about 3-4 second), I hear the "GoodBye" music from windows, as when you decide to quit and either leave a session or shut down the computer.
And it brings me back to that exact same window where I can choose my profile(only have one), or the only other option I have at that point is to ShutDown/Restart my computer.

Only other thing I could think of was logging in using the Safe-Mode.
Tried f8, choosed the safe mode and here what it does.
I see the big windows sign (fullscreen, showing that it's loading) but then my screen "blinks" 2 more times (just like if I had unplugged the monitor from the wall), so it flashes2-3 times, then I see some kind of dos screen with text only on the bottom line. It seems to load the drivers..It keeps loading for a while (seems to run much slower in safe mode.. not supposed to)
And it brings me to the same login place where I can do nothing more.

(in safe mode, I thought colors would be less detailed, and I usually have safe mode signs in each corner; not this time.. maybe because I did not finish logging into windows..?!)

I had taken a screenshot of the trojan/spyware that were removed, but of course, this image with the useful information is still in my pc and.. I cannot access any information on it.

So from the little I know, if there was a way to go into dos, maybe something could get done this way, or if anyone has a way of fixing this using the BIOS only ?..

If you could help me get this fixed, I'd really appreciate. Even just opening windows would allow me to back a few things up, and try a few other things too.
But I've recently decided to go full time on Internet marketing, and I CANNOT afford to waste my time like this at this moment.. :/

Thanks for your time and help
Jeff