I don't know the answer to either of these, I bought it used.
See...
Cleaning a Compromised System
http://technet.microsoft.com/en-us/library/cc700813.aspx
Yes, it's a compromised system. Back-up any personal data (none of which
should be considered 100% trustworthy at this point) then format the HDD &
do a clean install of Windows. Please note that a Repair Install (AKA
in-place upgrade) will NOT fix this!
HOW TO do a clean install of WinXP: See
http://michaelstevenstech.com/cleanxpinstall.html#steps and/or Method 1 in
http://support.microsoft.com/kb/978307
After the clean install, you will have the equivalent of a "new computer" so
take care of everything on the following page before otherwise connecting
the machine to the internet or a local network (i.e., other computers) and
before connecting a flash drive, SDCard, or any other external drive to the
computer:
4 steps to help protect your new computer before you go online
http://www.microsoft.com/security/pypc.aspx
Other helpful references include:
HOW TO get a computer running WinXP Gold (no Service Packs) fully patched
(after a clean install)
http://groups.google.com/group/microsoft.public.windowsupdate/msg/3f5afa8ed33e121c
HOW TO get a computer running WinXP SP1(a) or SP2 fully patched (after a
clean install)
http://groups.google.com/group/microsoft.public.windowsxp.general/msg/a066ae41add7dd2b
Tip: After getting the computer fully-patched, download/install KB971029
manually before connecting any external drive to the computer:
http://support.microsoft.com/kb/971029
NB: Any Norton or McAfee free-trial that came preinstalled on the computer
when you bought it will be reinstalled (but invalid) when Windows is
reinstalled. You MUST uninstall the free-trial AND download/run the
appropriate removal tool BEFORE installing any updates, Windows Service
Packs or IE upgrades AND BEFORE installing your new anti-virus application
(which will require WinXP SP3 to be installed).
Norton Removal Tool
ftp://ftp.symantec.com/public/english_us_canada/removal_tools/Norton_Removal_Tool.exe
McAfee Consumer Products Removal Tool
http://download.mcafee.com/products/licensed/cust_support_patches/MCPR.exe
Also see:
Risks & Benefits of P2P file sharing
http://www.microsoft.com/protect/data/downloadfileshare/filesharing.aspx
http://blogs.technet.com/mmpc/archive/2008/10/06/the-cost-of-free-software.aspx
Steps To Help Prevent Spyware
http://www.microsoft.com/security/spyware/prevent.aspx
Steps to Help Prevent Computer Worms
http://www.microsoft.com/security/worms/prevent.aspx
Avoid Rogue Security Software!
http://www.microsoft.com/security/antivirus/rogue.aspx
If you need additional assistance, please begin a new thread in this forum:
http://social.answers.microsoft.com/Forums/en-US/xprepair/threads
If these procedures look too complex - and there is no shame in admitting
this isn't your cup of tea - take the machine to a local, reputable and
independent (i.e., not BigBoxStoreUSA or Geek Squad) computer repair shop.