Somewhere our computer picked up a BIG malware issue...

This thing has hijacked the computer. The only program usable is IE. Everytime any sort of automatic protection attempts to activate.. I get a XXX.exe is infected and will now shut down message. The infection also will not let any downloaded program to be started locally.. In addition it won't let if I attempt to start Windows in safe mode.. it immediately shuts down and starts it over again not in safe mode. Aslo it randomly shuts down and clears the cache and restarts the computer.. It also made an infected copy as the system restore point....

If I click any of the fake warnings it connects to the net and sends the computer to a 'security' website where you can pay for supposed disinfection.

Its screens almost look identical to Windows screens.. so I am guessing that is how it got in.. the wife or one of the kids got a message and clicked okay thinking it was something the computer was doing on its own.
Any ideas????