I had one that was so nasty I ended up formatting my hard drive. It was the same kind of thing. The desktop was changed to "you are infected" and there were nonsense popups about various viruses. The problem with this one was it intercepted all of the maintenance tool calls (regedit, system restore etc). I was even infected in safe mode. I could manage to get it going in command line but all of the useful commands were blocked. I was able to retrieve most of my data but I was afraid to move to much in fear of moving the virus.
