How does this work?

[GT40FIED]

Ok...so in my ongoing quest to kick the living shit out of all malware on my computer, I downloaded the new Adaware SE 1.05 and ran a scan on my hard drive. Suddenly I've got 300+ hits (on a deep system scan) or 145 in the "smart scan". I think "kick ass...goodbye spyware". Wrong. I got rid of it all, but then everything stopped working. I can't connect to webpages and my internet connection is virtually useless. I can't use Norton's Liveupdate or check for updates on anything that requires an internet connection. Oh...and my Outlook is useless as well. So I did a system restore...but all that did was restore all the spyware as well. So is there any way to get rid of this stuff (most of the hits were multiples from the same vendors...really only about 10 vendors or so, maybe less) and not render my computer useless? It also SIGNIFICANTLY slows down the computer as a whole after the spyware is gone and the system rebooted. Ideas? Suggestions? I'm about ready to do a reformat since I'm so sick of this shit.