See if IE will open using the "Windows Update" shortcut on the Start Menu. If so, the problem is most likely spyware.
If you haven't already, download, install,
immediately update and then run
Spybot and/or
Ad-Aware. Read the help files to familiarize yourself with how they work. I recommend you use them both since each tends to find things the other misses. Let them clean up any spyware found.