safe mode popped up a warning
worm.win32.skynet detected on your system blah blah
Does Windows do that? or is this malware?
And the problem with trying to eradicate a virus from an infected system, using the AV software on said system, is dubious IMHO. It should ideally be done from a RO boot CD with up to date AV software and virus definitions. And even then I consider it dicey, in that, I don't trust that the system is clean unless it's wiped, and rebuilt, starting with all the safeguards on max.
But that's just me.
Check here: worm.win32.skynet. Caution, I've not used this removal tool. You might want to do a Google search first.
That ‘worm.win32.skynet’ message, was that generated by AVG or did it just pop up out of XP?