As per your instructions i have completed the process of the removing the problem i am facing by the message 'generic host process for Win32 Services has encountered a prblem and needs to close'.

After that My Hijackthis Log is

Logfile of HijackThis v1.99.1
Scan saved at 7:18:08 PM, on 5/18/2007
Platform: Windows XP SP2 (WinNT 5.01.2600)
MSIE: Internet Explorer v6.00 SP2 (6.00.2900.2180)
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\system32\spoolsv.exe
C:\PROGRA~1\Grisoft\AVG7\avgamsvr.exe
C:\PROGRA~1\Grisoft\AVG7\avgupsvc.exe
C:\Program Files\Common Files\Microsoft Shared\VS7Debug\mdm.exe
C:\WINDOWS\System32\svchost.exe
C:\Program Files\Canon\CAL\CALMAIN.exe
C:\WINDOWS\system32\wscntfy.exe
C:\WINDOWS\Explorer.EXE
C:\Program Files\Hewlett-Packard\OrderReminder\OrderReminder.exe
C:\PROGRA~1\Grisoft\AVG7\avgcc.exe
D:\Program Files\Nokia\Nokia PC Suite 6\LaunchApplication.exe
C:\WINDOWS\SOUNDMAN.EXE
C:\WINDOWS\system32\hkcmd.exe
D:\Program Files\Microsoft Office\Office12\GrooveMonitor.exe
C:\Program Files\MSN Messenger\MsnMsgr.Exe
C:\Program Files\Messenger\msmsgs.exe
C:\WINDOWS\system32\ctfmon.exe
C:\Program Files\Common Files\Ahead\Lib\NMBgMonitor.exe
C:\Program Files\Common Files\Ahead\Lib\NMIndexingService.exe
C:\Program Files\PC Connectivity Solution\ServiceLayer.exe
C:\Program Files\Common Files\Ahead\Lib\NMIndexStoreSvr.exe
D:\Program Files\Microsoft Office\Office12\WINWORD.EXE
D:\Program Files\HijackThis\HijackThis.exe
R1 - HKCU\Software\Microsoft\Internet Connection Wizard,ShellNext = http://uk.mcafee.com/root/campaign.asp?cid=9114
O2 - BHO: Groove GFS Browser Helper - {72853161-30C5-4D22-B7F9-0BBC1D38A37E} - D:\PROGRA~1\MICROS~1\Office12\GRA8E1~1.DLL
O2 - BHO: Windows Live Sign-in Helper - {9030D464-4C02-4ABF-8ECC-5164760863C6} - C:\Program Files\Common Files\Microsoft Shared\Windows Live\WindowsLiveLogin.dll
O3 - Toolbar: (no name) - {0BF43445-2F28-4351-9252-17FE6E806AA0} - (no file)
O4 - HKLM\..\Run: [OrderReminder] C:\Program Files\Hewlett-Packard\OrderReminder\OrderReminder.exe
O4 - HKLM\..\Run: [AVG7_CC] C:\PROGRA~1\Grisoft\AVG7\avgcc.exe /STARTUP
O4 - HKLM\..\Run: [McAfee Guardian] "C:\Program Files\McAfee\McAfee Shared Components\Guardian\CMGrdian.exe" /SU
O4 - HKLM\..\Run: [NeroFilterCheck] C:\Program Files\Common Files\Ahead\Lib\NeroCheck.exe
O4 - HKLM\..\Run: [PCSuiteTrayApplication] D:\Program Files\Nokia\Nokia PC Suite 6\LaunchApplication.exe -startup
O4 - HKLM\..\Run: [SoundMan] SOUNDMAN.EXE
O4 - HKLM\..\Run: [IgfxTray] C:\WINDOWS\system32\igfxtray.exe
O4 - HKLM\..\Run: [HotKeysCmds] C:\WINDOWS\system32\hkcmd.exe
O4 - HKLM\..\Run: [GrooveMonitor] "D:\Program Files\Microsoft Office\Office12\GrooveMonitor.exe"
O4 - HKCU\..\Run: [MsnMsgr] "C:\Program Files\MSN Messenger\MsnMsgr.Exe" /background
O4 - HKCU\..\Run: [MSMSGS] "C:\Program Files\Messenger\msmsgs.exe" /background
O4 - HKCU\..\Run: [ctfmon.exe] C:\WINDOWS\system32\ctfmon.exe
O4 - HKCU\..\Run: [BgMonitor_{79662E04-7C6C-4d9f-84C7-88D8A56B10AA}] "C:\Program Files\Common Files\Ahead\Lib\NMBgMonitor.exe"
O4 - Startup: OneNote 2007 Screen Clipper and Launcher.lnk = D:\Program Files\Microsoft Office\Office12\ONENOTEM.EXE
O4 - Global Startup: Adobe Gamma Loader.lnk = C:\Program Files\Common Files\Adobe\Calibration\Adobe Gamma Loader.exe
O8 - Extra context menu item: E&xport to Microsoft Excel - res://D:\PROGRA~1\MICROS~1\Office12\EXCEL.EXE/3000
O9 - Extra button: Send to OneNote - {2670000A-7350-4f3c-8081-5663EE0C6C49} - D:\PROGRA~1\MICROS~1\Office12\ONBttnIE.dll
O9 - Extra 'Tools' menuitem: S&end to OneNote - {2670000A-7350-4f3c-8081-5663EE0C6C49} - D:\PROGRA~1\MICROS~1\Office12\ONBttnIE.dll
O9 - Extra button: Research - {92780B25-18CC-41C8-B9BE-3C9C571A8263} - D:\PROGRA~1\MICROS~1\Office12\REFIEBAR.DLL
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/windowsu...?1179476463234
O16 - DPF: {6E32070A-766D-4EE6-879C-DC1FA91D2FC3} (MUWebControl Class) - http://update.microsoft.com/microsof...?1179478549344
O18 - Protocol: grooveLocalGWS - {88FED34C-F0CA-4636-A375-3CB6248B04CD} - D:\PROGRA~1\MICROS~1\Office12\GR99D3~1.DLL
O18 - Protocol: livecall - {828030A1-22C1-4009-854F-8E305202313F} - C:\PROGRA~1\MSNMES~1\MSGRAP~1.DLL
O18 - Protocol: ms-help - {314111C7-A502-11D2-BBCA-00C04F8EC294} - C:\Program Files\Common Files\Microsoft Shared\Help\hxds.dll
O18 - Protocol: msnim - {828030A1-22C1-4009-854F-8E305202313F} - C:\PROGRA~1\MSNMES~1\MSGRAP~1.DLL
O18 - Filter hijack: text/xml - {807563E5-5146-11D5-A672-00B0D022E945} - C:\PROGRA~1\COMMON~1\MICROS~1\OFFICE12\MSOXMLMF.DLL
O23 - Service: Adobe LM Service - Unknown owner - C:\Program Files\Common Files\Adobe Systems Shared\Service\Adobelmsvc.exe
O23 - Service: AVG7 Alert Manager Server (Avg7Alrt) - GRISOFT, s.r.o. - C:\PROGRA~1\Grisoft\AVG7\avgamsvr.exe
O23 - Service: AVG7 Update Service (Avg7UpdSvc) - GRISOFT, s.r.o. - C:\PROGRA~1\Grisoft\AVG7\avgupsvc.exe
O23 - Service: Canon Camera Access Library 8 (CCALib8) - Canon Inc. - C:\Program Files\Canon\CAL\CALMAIN.exe
O23 - Service: NBService - Nero AG - C:\Program Files\Nero\Nero 7\Nero BackItUp\NBService.exe
O23 - Service: NMIndexingService - Nero AG - C:\Program Files\Common Files\Ahead\Lib\NMIndexingService.exe
O23 - Service: ServiceLayer - Nokia. - C:\Program Files\PC Connectivity Solution\ServiceLayer.exe

and Look2Me Distroyer.txt file contains

Look2Me-Destroyer V1.0.12
Scanning for infected files.....
Scan started at 5/18/2007 7:09:10 PM

Attempting to delete infected files...
Making registry repairs.

Restoring Windows certificates.
Replaced hosts file with default windows hosts file

Restoring SeDebugPrivilege for Administrators - Succeeded

Now please guide me further as i am getting the problem still after doing all the above process instructed by you.

Thanks

Don't know what instructions you got but go here and get the HotFix.

http://support.microsoft.com/kb/894391

Make sure also to do a windows update.

Fix these with HJT.

O3 - Toolbar: (no name) - {0BF43445-2F28-4351-9252-17FE6E806AA0} - (no file)

Thats the only thing in your HJT it is clean.it isn't spy or ad ware updating your windows should solve the problem.

Win32 usually reflects to your communication files. I don't know if you are having issues with your modem. Usually when you have Win32 error you cannot or have trouble connecting to the internet.

on TT4Titans if you download this Fix be sure that you are experiencing trouble view Email HTML files. Such as Jpegs not showing.

However, Looking at your running process. Which mean what programs were running when your ran the scan, You have alot of programs. It maybe linked to a Resource issue. (To many startup programs)

Be sure to check what bit system you have. If you have purchased your Windows XP OS from 2001 - 2005 it more then likely is the 64bit. But check with your manufacture.

Hope that helps

RueB 2s De