Windows Explorer is not responding. APPCRASH

Hey Guys, There is a major problem here. Please help me out.

I have an Acer netbook (OS: windows 7 starter). Its only been 10 months since the purchase.
I was online yesterday downloading stuff from utorrent, youtube, and surfing the web by firefox.
At first the firefox crashed and on the message display i restarted it as would happen on any ordinary day.
but it crashed again within few minutes, this is unusual.
This time after crashing, the message displayed/ the dialogue box was "Windows Explorer is not responding".
two options were given, 1- check online for solution and restart windows explorer, 2- restart windows explorer.
No matter what option i choose, after maximum of 1 sec of the restart, the dialogue box reappears!
I cannot do anything, cannot open a file, delete anything, cannot open "my computer", everything is blocked since the "windows explorer is not responding" nothing except the dialogue box is working!
I cannot even shut down the computer from the start menu, have to do it by pressing and holding the power button, due to which the computer before starting up again asks if i want to start windows normally or with safe mode -> i have tried safe mode, but the problem is still the same.
I managed to restore the system to three days earlier point, but the problem is still there somehow!!!

Please, ANY help is more than appreciated.
Thanks Everyone

below is the extra information displayed in the dialogue box. There is more to it, if anyone wants i can type that too...


Problem Event Name: APPCRASH
Application Name: explorer.exe
Fault Module Name: xvidcore.dll
Exception Code: c0000005
Exception Offset: 000693f3

Hello Juniorgeek and Welcome to Windows 7 forums.

Firstly can you boot into safe mode? If so does the problem still exist?
I would recommend doing a disk check and System file check before moving on to other tests. Also I would run a malware scan to be sure your Explorer.exe hasn't been hijacked.

Upon looking into the "Fault Module Name: xvidcore.dll" error for some information I ran right into someone's fixed own problem thread. Apps crash

Unfortunately there wasn't a lot of detail as to how extensive and persistent the explorer errors were but that always seems to appear more then any other despite the device driver, software driver, app, etc having a problem since you are looking at the main desktop/shell file itself. You will typically see that come up with browsers as well as other apps.

If the Acer came with 7 on it already the preinsall as greg was saying could be loaded with errors besides the usual bloatwares. Or if you performed a custom install getting the netbook without any OS to put 7 on you still could be facing the need for a fresh copy of 7. A couple of months back I finally started getting a number of explorer.exe errors with the default browser as well as just about anything else and knew it was time.

The Jan 2010 clean install replaced with a restored image in Oct 2010 and ran for 2 1/2yrs. wasn't even expected to run as well as it did for that long before a clean install was a mandate! But neither does it take that long for Windows to suddenly see problems come up out of nowhere! Sometimes the last resort is the first best move on those occasions.