Hang on,
I have just realised that you shouldn't have a C:\Winnt folder, because that is for Windows 2000 and you are running Windows XP.

The folder should be C:\Windows\System32\drivers\etc, see if this and the drivers folder exist...

Edit... I do have that file.

drivers\etc. it's here.

And these files are in the folder:

Thats all correct then. No problems there.

Have you got a firewall installed?

This is the thing:

After all that spy-ware attacked me I did set up some firewall. I'm pretty sure it was in Nortons. But now, when I go back to change the firewall settings, it says I'm not logged in. It asks for a password that I was never aware I had. The last time I used Norton's for the firewall it didn't ask me for a password. So I don't know where to find this information.

Can you tell me what version of Norton Personal Firewall you are running?

Ah, I'm pretty sure it was "Norton Internet Security 2003"/"Norton Antivirus 2003"

Right, could you download Sygate and AVG from the Hijack This Logs post at the top of this forum and after you have done that, uninstall Norton temporarily (make sure you have a backup). See if this solves your problems.

I think I found the definite reason for the problem. It appears that I have somehow removed Active X. Isn't that the program that enables network connectivity? I know that Active X is nessicary for Windows Updates.. So I'm nearly positive that this is the issue. What is a reliable source to re-download Active X from?