Desktop Do Not Work - White Screen Shifted Different Shades

I recently had some spyware that took over my desktop. Everytime I would right click on my desktop it would bring up the options as if it was right clicking on a document in Internet explorer. So I went to view source and discovered that it was linking to C:windowsdesktop.html. I went and deleted that file. My desktop then went to a white screen that shifted to different shades of white. So I figured that some spyware program is still trying to reference that file. I dug through my registry via regedit and searched for anything that may be linking to that same C:windowsdesktop.html and I found one "PersistMoniker" and deleted the entry. Now my desktop has a sidebar, just like the ones if you were to open My Computer and on the left side of the window it has the System Tasks/Other Places/Details and their drop downs. Exactly the same thing with the exception that its now for my desktop and those options are Folder Tasks/Other Places/Details. I've taken a screenshot but have no web to upload the image too. If this is needed I can email it to whomever decides to help me Other things to note would be that if I go to Start -> Run... and type in explorer. It will just boot me back to the desktop after a flash of all my windows disappearing. Instead of launching windows explorer. There is an error message but it appears when I shut down the computer and it flashes so quickly that i cannot read it. The computer shuts down normally.