Yup. it sounds like a variant of the FakeAV family... That family of bugs can be further divided between 'easy fix' which any AV should handle, and 'with rootkit', in which most AVs can kill the imported bugs, but cannot see the rootkit itself, which just keeps surreptitiously downloading and re-installing the bugs in the background. This sounds like the rootkit variety, and with the exception of combofix, most of the suggestions here won't fix the problem.
However, before applying combofix, read on:
I see nobody has mention Kaspersky tdsskiller, can be downloaded from the Kaspersky site, easy to use and quick. It has helped me fix several friends computers that were infected with similar malware.
EXCELLENT suggestion! Depending upon the variant, Kaspersky's AVPTool will usually kill it, and will remove any other bugs as well - The only instance I am aware of where KAV's AVPTool won't fix is if it encounters the TDSS rootkit - It will know it is there, and inform you of it, and recommend running TDSSKiller and then AVPTool again. FakeAV sometimes employs TDSS, so it is a possibility here.
Probably the best method would be to DL TDSSKiller first and run it (takes minutes), and then DL and run AVPTool once the kit is removed (if found). !!!Warning!!! these tools are meant for service techs and may behave unexpectedly for home users!!! READ THE MANUALS!!!
After the bugs are dead, I would recommend installing and using (on a regular basis) CCleaner, Spybot Search & Destroy, Malwarebytes (free ver), and Microsoft Security Essentials - feel free to FreepMail me for use and instruction if needed.
If you become infected often hereafter, I would suggest uninstalling MSE and buy Kaspersky Anti-Virus (not Security Suite) or Esset's Nod32 instead... and figger out why you tend to get infected (usually high school aged children) and changing those habits...