Windows 7: Windows Update crashes Windows Explorer, System Restore

I have an Acer 4810t laptop, 3GB Memory running Windows 7 home edition 32 bit. I have no 3rd party firewall and am running Norton 360 (subscription fine and up to date)

Was working fine until recently. First thing I noticed was computer wont shut down. It progresses, logs off and goes to 'Shutting Down' screen. But never gets passed this. I normally have to hard reboot, although at one point it did go to a blue screen of death.

I thought I might, then, need to update system, but I cannot get to my Windows Update screen. I choose it from Control Panel and Windows Explorer freezes. The pointer turns to a rotating circle, and that is it. I cannot even kill it in task manager.l

Finally, I thought I'd try a System Restore but this won't even load into a window at all. Clicking it has no effect.

Lastly, I did try a fix I saw somewhere about the SQMCLient but this this didnt fix anything.

I really hope someone can help!!

Anti-Virus Removal:
Please do the following:
- download a free antivirus for testing purposes: Free AntiVirus
- uninstall the Norton from your system (you can reinstall it, if so desired, when we're done troubleshooting)
- remove any remnants of Norton using this free tool: Download and run the Norton Removal Tool
- IMMEDIATELY install and update the free antivirus
- check to see if this fixes the crashes/freezes

Hey Guys,

So latest is. I restored to an earlier period, removed Norton and any traces of earlier virus checkers. So now I can access Windows Update and System Restore.

However, I am still getting the problem where Windows doesn't shut down properly. It gets to the 'Shutting Down' screen and remains there indefinitely. I have to hard crash the system to get it to restart.

Not only that, but if I try and create a restore point I get the following message.
"A Shadow Copy could not be created for the following reason:The creation of a shadow copy has timed out.Try again this operation.(0x81000101)"

Overall, its a bit strange, as sometimes it does seem to restart ok (usually directly after a System Restore), but then reverts to stalling at shutdown.

Lastly, not sure if this is important, but I've noticed when it's in the state where it doesnt shut down properly, I have missing icons in the lower right hand corner task bar. Normally I can see my volume control and wireless meter. When it is in this state these are missing.

I should also say I followed the steps above about the verifier.exe for drivers and haven't seen any issues come up. The minidump folder is still empty. I dont actually get a BSOD as the screen just stalls on 'Shutting Down'

You've all been brilliant so far, hope you can help in this last step!