Our desktop (that my wife uses while I'm on the laptop) was running AVG free anti-virus. Over the weekend we were checking old music vids on Youtube and a trojan warning popped up. We tried deleting but an error message that the "virus vault is full" came up. The virus vault display showed nothing, completely empty. This little beastie has also blocked internet access.

After scanning (failed, caused rebooting) and system restoration, a new icon came up in the service tray for "System Security." A click brings up another adware screen that the computer is infected and a prompt to activate.

Is this dll file the trojan AVG warned about or is this a Windows update?