Malware or Mistake ?

Recently a friend helped me recover from a trojan infection by re-formatting my hard drive and re-installing the operating system as a result (not noticed at the time) I found System Restore and Firewall non functional. System Restore makes no restore points, will not make a manual restore point and will not work using Scheduled Tasks. Firewall claims the service is not running and asks if I want to start Windows Firewall Internet Sharing Service. Everything seems normal, sometimes a little slow. I use two hard drives (one for the operating system and programs and the other for data storage). AVG finds nothing. I use Firefox internet browser. Is this situation the result of Malware or some mistake?
Thanks in advance.
below is the Hijackthis log file

Logfile of Trend Micro HijackThis v2.0.2
Scan saved at 2:24:56 PM, on 3/16/2009
Platform: Windows XP SP3 (WinNT 5.01.2600)
MSIE: Internet Explorer v6.00 SP3 (6.00.2900.5512)
Boot mode: Normal

Running processes:
C:\WINDOWS\System32\smss.exe
C:\WINDOWS\system32\winlogon.exe
C:\WINDOWS\system32\services.exe
C:\WINDOWS\system32\lsass.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\Explorer.EXE
C:\WINDOWS\system32\spoolsv.exe
C:\Program Files\Google\Update\GoogleUpdate.exe
C:\PROGRA~1\AVG\AVG8\avgtray.exe
C:\WINDOWS\system32\hkcmd.exe
C:\Program Files\Microsoft Office\Office12\GrooveMonitor.exe
C:\Program Files\Winamp\winampa.exe
C:\Program Files\HP\HP Software Update\HPWuSchd2.exe
C:\WINDOWS\system32\ctfmon.exe
C:\Program Files\Logitech\MouseWare\system\em_exec.exe
C:\Program Files\HP\Digital Imaging\bin\hpqtra08.exe
C:\Program Files\Microtek\ScanWizard 5\ScannerFinder.exe
C:\PROGRA~1\AVG\AVG8\avgwdsvc.exe
C:\WINDOWS\system32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\WINDOWS\System32\svchost.exe
C:\PROGRA~1\AVG\AVG8\avgrsx.exe
C:\WINDOWS\system32\svchost.exe
C:\PROGRA~1\AVG\AVG8\avgemc.exe
C:\Program Files\AVG\AVG8\avgcsrvx.exe
C:\WINDOWS\system32\wuauclt.exe
C:\Program Files\HP\Digital Imaging\bin\hpqSTE08.exe
C:\Program Files\HP\Digital Imaging\bin\hpqbam08.exe
C:\PROGRA~1\AVG\AVG8\avgnsx.exe
C:\Program Files\Mozilla Thunderbird\thunderbird.exe
C:\Program Files\Mozilla Firefox\firefox.exe
C:\Program Files\Trend Micro\HijackThis\HijackThis.exe

R1 - HKCU\Software\Microsoft\Internet Connection Wizard,ShellNext = http://windowsupdate.microsoft.com/
O2 - BHO: WormRadar.com IESiteBlocker.NavFilter - {3CA2F312-6F6E-4B53-A66E-4E65E497C8C0} - C:\Program Files\AVG\AVG8\avgssie.dll
O2 - BHO: Groove GFS Browser Helper - {72853161-30C5-4D22-B7F9-0BBC1D38A37E} - C:\PROGRA~1\MICROS~2\Office12\GRA8E1~1.DLL
O2 - BHO: Google Toolbar Notifier BHO - {AF69DE43-7D58-4638-B6FA-CE66B5AD205D} - C:\Program Files\Google\GoogleToolbarNotifier\5.0.926.3450\swg.dll
O4 - HKLM\..\Run: [AVG8_TRAY] C:\PROGRA~1\AVG\AVG8\avgtray.exe
O4 - HKLM\..\Run: [IgfxTray] C:\WINDOWS\system32\igfxtray.exe
O4 - HKLM\..\Run: [HotKeysCmds] C:\WINDOWS\system32\hkcmd.exe
O4 - HKLM\..\Run: [NeroFilterCheck] C:\Program Files\Common Files\Ahead\Lib\NeroCheck.exe
O4 - HKLM\..\Run: [GrooveMonitor] "C:\Program Files\Microsoft Office\Office12\GrooveMonitor.exe"
O4 - HKLM\..\Run: [Logitech Utility] Logi_MwX.Exe
O4 - HKLM\..\Run: [WinampAgent] "C:\Program Files\Winamp\winampa.exe"
O4 - HKLM\..\Run: [HP Software Update] C:\Program Files\HP\HP Software Update\HPWuSchd2.exe
O4 - HKCU\..\Run: [ctfmon.exe] C:\WINDOWS\system32\ctfmon.exe
O4 - HKUS\S-1-5-21-343818398-362288127-725345543-500\..\Run: [ctfmon.exe] C:\WINDOWS\system32\ctfmon.exe (User '?')
O4 - Global Startup: Adobe Gamma Loader.exe.lnk = C:\Program Files\Common Files\Adobe\Calibration\Adobe Gamma Loader.exe
O4 - Global Startup: Adobe Gamma Loader.lnk = C:\Program Files\Common Files\Adobe\Calibration\Adobe Gamma Loader.exe
O4 - Global Startup: HP Digital Imaging Monitor.lnk = C:\Program Files\HP\Digital Imaging\bin\hpqtra08.exe
O4 - Global Startup: Microtek Scanner Finder.lnk = C:\Program Files\Microtek\ScanWizard 5\ScannerFinder.exe
O8 - Extra context menu item: Add to Google Photos Screensa&ver - res://C:\WINDOWS\system32\GPhotos.scr/200
O8 - Extra context menu item: E&xport to Microsoft Excel - res://C:\PROGRA~1\MICROS~2\Office12\EXCEL.EXE/3000
O9 - Extra button: Send to OneNote - {2670000A-7350-4f3c-8081-5663EE0C6C49} - C:\PROGRA~1\MICROS~2\Office12\ONBttnIE.dll
O9 - Extra 'Tools' menuitem: S&end to OneNote - {2670000A-7350-4f3c-8081-5663EE0C6C49} - C:\PROGRA~1\MICROS~2\Office12\ONBttnIE.dll
O9 - Extra button: Research - {92780B25-18CC-41C8-B9BE-3C9C571A8263} - C:\PROGRA~1\MICROS~2\Office12\REFIEBAR.DLL
O9 - Extra button: (no name) - {e2e2dd38-d088-4134-82b7-f2ba38496583} - C:\WINDOWS\Network Diagnostic\xpnetdiag.exe
O9 - Extra 'Tools' menuitem: @xpsp3res.dll,-20001 - {e2e2dd38-d088-4134-82b7-f2ba38496583} - C:\WINDOWS\Network Diagnostic\xpnetdiag.exe
O9 - Extra button: Messenger - {FB5F1910-F110-11d2-BB9E-00C04F795683} - C:\Program Files\Messenger\msmsgs.exe
O9 - Extra 'Tools' menuitem: Windows Messenger - {FB5F1910-F110-11d2-BB9E-00C04F795683} - C:\Program Files\Messenger\msmsgs.exe
O16 - DPF: {6414512B-B978-451D-A0D8-FCFDF33E833C} (WUWebControl Class) - http://update.microsoft.com/windowsupdate/v6/V5Controls/en/x86/client/wuweb_site.cab?1236307584262
O18 - Protocol: grooveLocalGWS - {88FED34C-F0CA-4636-A375-3CB6248B04CD} - C:\PROGRA~1\MICROS~2\Office12\GR99D3~1.DLL
O18 - Protocol: linkscanner - {F274614C-63F8-47D5-A4D1-FBDDE494F8D1} - C:\Program Files\AVG\AVG8\avgpp.dll
O20 - Winlogon Notify: avgrsstarter - C:\WINDOWS\SYSTEM32\avgrsstx.dll
O23 - Service: AVG Free8 E-mail Scanner (avg8emc) - AVG Technologies CZ, s.r.o. - C:\PROGRA~1\AVG\AVG8\avgemc.exe
O23 - Service: AVG Free8 WatchDog (avg8wd) - AVG Technologies CZ, s.r.o. - C:\PROGRA~1\AVG\AVG8\avgwdsvc.exe
O23 - Service: Google Update Service (gupdate1c99eac13b1c230) (gupdate1c99eac13b1c230) - Google Inc. - C:\Program Files\Google\Update\GoogleUpdate.exe
O23 - Service: Google Software Updater (gusvc) - Google - C:\Program Files\Google\Common\Google Updater\GoogleUpdaterService.exe
O23 - Service: NBService - Nero AG - C:\Program Files\Nero\Nero 7\Nero BackItUp\NBService.exe

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End of file - 5471 bytes

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