The machine I saw this on had two infections. The second may or not be on your system.
This infection places its files in c:\documents and settings\all users\application data\<Random folder name>
reboot into safe mode and delete the folder that it created. There will be a link that it puts on your desktop that will point to that folder to give you a hint of which one to remove. The one I saw had two infected folders with the same files in each, but the link only went to one of them. Open registry editor and search for that random folder name. Remove any keys refrencing anything in that folder.
Reboot, and you will be better, but not fixed yet. Task manager is still disabled.
Open registry editor and navigate to [HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Policies\System]
There you will find the key "DisableTaskMgr" Change it back to 0 to reenable your task manager
The second potentially related infection had a little popup in the system tray. Open your now functional task manager and look for processes running as the user account that don't make sense. The one we had was a file called winupdate.exe in the c:\windows\system32\ folder. End the process, then browse to the file and rename it to winupdate.exe.bad. Go back to the registry editor and find all appearances of that file path, and delete those keys.
Reboot, and you should be fine. Malware bytes will run properly now to remove any other infections.
BTW, This information is provided for free with no expressed or implied warranty. Use it at your own risk. In other words, I am not liable if you break your computer trying this.
Earlier tonight I was looking at the weather and yahoo.com. Clicked on a story on the yahoo page, next thing I know it takes me to some kind of search page. From then on, I kept getting messages saying my 'system was infected' and I needed to 'turn on/update my antivirus software'.
So this is what's been happening: I go to run Malwarebytes and SpyHunter, but I can't. No .exe files appear to be working. I go to task manager, button is grayed out. I restart computer for safe mode (plane jane, with command prompt, and with networking) which it won't let me log into. Keeps saying "Sorry for the inconvenience, but Windows could not start successfully". So I have to either start Windows regularly or start it in last known working condition. Same results on the restart - nothing works and I am getting informed like crazy that my system is under attack. Even had my desktop wallpaper consumed by a giant "YOUR SYSTEM IS INFECTED" message, or something close to that.
After another reboot or two, I was able to get Malwarebytes to work and ran a scan. Found about 20 infected files, which I had removed, however there were some it said it could not remove unless I rebooted my PC. So I rebooted. Windows Smart Security was still there. Rebooted again, ran Malware full scan this time. Found 1 infected file. "Hijack.FolderOptions" etc etc.
So has anyone heard of this program / virus before? I've had run ins with these sorts of programs, but SpyHunter / Malwarebytes usually takes care of it.