You have either the MENACE.A (or W95.SOFUNNY.WORM@M) virus.
Go here to TrendMicro for an on-line scan & set it to autoclean for you.
Try this scan at Panda as well.
Once done, reboot & do the following:
Close all (browser) windows & rescan with hijackthis. When the scan is finished place a check in the box to the left of the following entries & click 'fix checked':
R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Search Bar = http://red.clientapps.yahoo.com/cus.../search/ie.html
R1 - HKCU\Software\Microsoft\Internet Explorer\Main,Search Page = http://red.clientapps.yahoo.com/cus...//www.yahoo.com
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Default_Page_URL = http://red.clientapps.yahoo.com/cus...//www.yahoo.com
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Default_Search_URL = http://red.clientapps.yahoo.com/cus...//www.yahoo.com
R1 - HKLM\Software\Microsoft\Internet Explorer\Main,Search Page = http://red.clientapps.yahoo.com/cus...//www.yahoo.com
R1 - HKCU\Software\Microsoft\Internet Explorer\SearchURL,(Default) = http://red.clientapps.yahoo.com/cus...//www.yahoo.com
O2 - BHO: AIM Helper - {D70E6A20-7060-4829-B3D7-B6624A1DE7C6} - C:\PROGRAM FILES\AIM TOOLBAR\AIMHELPER.DLL (file missing)
O4 - HKLM\..\Run: [msdos423] c:\windows\msdos423.exe
O13 - WWW. Prefix: http://
Check in your c:\windows folder for this file msdos423.exe and delete it if found.
Reboot and post another log please.