The simple solution is to NOT use IE ever again.
I made the switch to Firefox/Thunderbird and have not had anything (I still scan just in case).
I have a friend who got the nasty Hot Kiss Porn dialler that made about $100 worth of phone calls (drops the connection and calls a premium rate number). Installed Mozilla (they have Win 95!) and they're fine now too.
So to the OP:
Reformat
Reinstall Windows/Applicatoins
Install and use Firefox/Thunderbird