windows 98 illegal operations on startup programs including Explorer!

My Presario notebook running win98se boots as normal, except after the logon
screen comes up, music plays, the desktop is displayed, I look by the clock
to watch the tray apps to appear, the first app has an "illegal operation"
rectangle show up saying it will be shut down. The same error screens appear
for all of the startup programs, then it says Explorer has performed an
illegal operation and will be shut down! It even gives the Explorer error in
Safe Mode!

This all started last night when I downloaded Spyware Blaster from
Download.com. The funny thing was when I was installing it it hanged right
at the end of the install when it was installing the .lnk shortcut. I
cancelled the install several times when it happened and retried it, same
result. I had to reboot and haven't gotten in successfully since.

I use AVG free, downloaded AdAware last night did a complete scan and during
the scan AVG popped up saying I had a Java virus in the Temp dir, I think I
took that out successfully, shouldn't have been a prob. anyway since I use
Sun Java and Firefox. I tried restoring registry from a couple days ago, no
luck.

I've searched online like crazy but no problem found quite like this....

Any ideas?!

thanks