weird problem...virus? or failing hdd

[bmxfreakrider]

ok ive been getting some weird, like really weird problems after unsucessfully trying to install mce2005. it didnt install, so i reinstalled xp sp1, and have backups of all my old files on my other hdd. so i go to update to sp2, open the file, and it said something about the middle of the file could not be read. i get the same error for every .exe file on that hdd. then it opens up a dl.exe file, and my internet usage lgith on my router goes straight bonkers, doesnt stay lit, just flashes very rapidly. the internet usage light stays still, but the light that indicates my pc is on the network is always flashing...would this be a virus?

and the second part, where the files can not be read, would that be failing hdd?

light pattern: _ = .25 second blank, + = .25sec lit

_+_+_+_+_+_+_+_+_+_+_+_+_+_+...etc, it goes on forever then i will try to access the internet, and i cant even load google, then the router resets. as soon as my pc leaves the network, it stops restarting. i dont know what it is, but if its a virus its already on this install that has been running for little less than an hour now. not really sure what it is, i will attach a screenshot in a bit.

[bmxfreakrider]

i had to scratch the program name out because it would probably get me yelled at about the name of the prog....
*cough*xphack.exe*cough*

btw, that is not a virus, ive had it for about a year now and just love it, gets it done, easyiest way to set it up when im working in my garage as we have no internet in there, and thats where im set up now (had to go find my wireless pci card to get on, i aint movin it till its done)