Hijackthis creates backup files, so move hijackthis.exe into a folder, don't run it from a temporary folder or your desktop. Make a folder on your...
Great! Please go do the M$ fix and then in control panel, add/remove programs remove new.net Reboot and post another log.
Just a thought, does he have admin rights on the machine?
Check this out for a fix: http://www.microsoft.com/security/incident/sasser.asp Then post the entire log, looks like you cut the bottom off.
Separate names with a comma.