At the bottom right of my screen there's a yellow balloon saying System Alert:malaware threats.

My computer is infected with a backdoor Trojan etc.

Click this balloon to downlaod malaware removal software.

Is this legit? I have another thing that I can't get rid of - virus burst - I can't get rid of it popping up, is this legit?

Help, any help much appreciated.

I tried AVG and put some files in the vault. What do I do now?

Two things spring to mind, first you could download avast from their website www.avast.com home user is free. In the toolbox it has a facility to do a boot scan and in my experience finds most things. However, as you are already infected this might not work but worth a try. My second option would be to go to microsoft home page and download a trojan remover tool again free.

The program is not legit, it is one of the newer Smitfraud infections, a fake antispyware program which produces false warnings to persuade you to buy the program. You can find detailed information on removal including a special tool here:

http://www.bleepingcomputer.com/forums/topic63896.html

If you need help to get rid of it, this page has info on forums where you can work through the removal with help.

Excellent - thanks a lot.