Debbuger issue

[TeenPcknowit]

(Windows Xp Issue)

Over the phone my friend mentioned Windows explorer is not functioning, system restore, along with most all other programs. He recieves an error message something along the lines of:
"Dr. Watson Debugger not funtioning"

Sounds to me like something has been screwing around with his windows folder.
Hacker? Virus?

I've recieved de-bugger errors in IE when certain areas of web pages woulnd't load, ect...
I told him to:
Boot into safe mode utilizing f8 at boot

Try system restore

If I ran into a problem such as this, I would probably just format, sigh, and say to myself, hey, its been a long time since I have anyways.
This is a family pc and constantly in use, I don't belive they want to think about having to start from scratch.

Any suggestions?

[codered6651]

It does sound like a virus/hacker problem. Are there any error messages? BSOD? Has your friend scanned for virii, spyware/malware? Have your friend to go here www.greyknight17.com/spyware.htm follow instructions carefully. Then place his HiJackThis Log in the System Security and Privacy Forum.