The problem is now fixed, after trying all the things suggested (thank You!), I created a Windows Repair CD and booted to this, this then allowed me to do a System Restore, but this advised it had failed, however after restarting the restore had actually worked? Thus removing the restart alert and allowing me to connect to the internet.
I ran further virus and spyware scans, no virus's found, but there were a few spyware, which were successfully cleaned.
System now in perfect working order again! :-)
Thank you again everyone!