My computer was infected with a joke or spyware program that I'm having trouble removing. It places a bmp image on my desktop telling me that my computer has been infected with spyware and to install spyware or anti-virus software to remove it.

It placed a bmp image file called phcj98j0e177.bmp and a scr file called blphcj98j0e177.bmp in my C:\Windows\System32 folder.

I tried to delete them both manually and by using Spyware Terminator, but the files always come back. It also disables the desktop tab in the display settings panel. I can restore it using a utility from Spyware Terminator, but the problem occurs every time I restart my computer.
Please Help!

Try the solution I offered here. It has been effective in many infections:

https://www.askmehelpdesk.com/computers-beginners/removing-advanced-registry-optimizer-242900.html#post1180221

Dude, I just got over the same problem but I also had security toolbar 7.1 to go along with it. It's Antivirus XP 2008 is most likely what you're looking at and the way I got rid of them both, as I was skeptical that this would work for the one your having trouble with, but it got rid of both. It's call "Malwarebytes' Anti Malware". Google Malwarebytes.org and you should easily find a download. It's not necessary to purchase the best version seeing as the regular version gets rid of it just fine. Make sure to install with all defaults and update! Do a regular scan, again, doing the full scan is not necessary (but it is free!). Now, I'm no subliminal advertiser, I just got over the two above afflictions earlier today with just that app. It simply rocks!! I've also been told that popular spybot and such really doesn't pin it down, only catches about half! *Feel free to do full scan, can't hurt, though I didn't*. Really do hope this helps cause I was about to freak when I got it, it was from a fake codec, I believe... Well, GOOD LUCK!! :D :D :D