I forgot to disable teatimer the previous time. I also ran all my other security software (avira, spyware, ccleaner, atf cleaner while I was in safe mode). It appears that the worm has been removed. It does not show up in the msconfig start menu anymore.
I did find I had to restart my computer in "last known config" after starting in safe mode though.
I need to read more about spybot, the help menu is pretty generic. There is some info I am not too sure about.
Thanks again for your support lurkswithin.