Sounds like Smitfraud, which usually comes along with Virtumonde and Vundo. This is one of the most annoying spyware infections to get rid of, because it's self-replicating and infects all kinds of crap.
You pretty much need to go to bleepingcomputer and post a HijackThis log (or post one here and I'll try to help you). You may have success by downloading Spybot S&D, VundoFix, SmitfraudFix, and ComboFix. Then, update Spybot, restart your computer into safemode (hit F8 every second or so as it boots). Run them all, in that order, and it takes care of most infections, but potentially not all. After doing that, post another HijackThis log.
I must warn you that ComboFix takes a long time to run and can permanently damage your Windows install if you've got a bad enough infection. The creators of the program say it's about a 1/100 chance that this will happen, though. Just make sure your Windows disc is ready, in case.
Also, stop downloading infected torrents, and tell anyone else on your local network to do the same. I can almost guarantee that's where it came from.