i would reformat my hard drive and start over and be very thorough about putting on windows critical updates, anti-virus updates and purchase a good fireall (e.g. ZoneAlarm) and run Ad-aware daily... there is no telling what you have on your pc now if you have an active 'back door' open. no way to clean it
While drastic, as Sgt_Shultz recommends, a full format is the best way to clean up the PC.
Some additional suggestions:
If you use a broadband internet connection, you should change your IP address. For a static IP address like most ADSL systems, all it takes is logging off, turning off the modem, then logging on again.
If you have a fixed IP address, you will need to work with your ISP to get a new address.
I would go further than just a format of the hard drive. Run fdisk and delete ALL logical drives and partitions. Run the fdisk /mbr command to clear the Master Boot Record. Then, partition the drive as desired.
on another computer to download at least the critical security updates for your version of Windows. Install the updates and a firewall BEFORE connecting the PC to any broadband or network connection.
I would first disconnect it from the network, then back up criical data. An option other than a rebuild could be disasterous, as there is almost certainly "new code" added as a backdoor if you clean/patch your system. If you have a dsl/cable router, I would update the firmware (manufacturers website). and turn on the firewall (most have one built in). There may be an option to allow "pings" and other internet traffic (for gaming) from the internet, turn this off. if they cant see you.....
Then rbuild the system and enable the windows firewall. Then reconnect it to the network and try again. P.S. some more tips, do not keep the same computername, change the administrator name, add an administrator alphanumeric password, avoid autologon tools.
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What to do if computers been taken over