The problem you faced was due to a spyware/virus/trojan which downloads itself in the location "documents and settings/user/application data/fawardfg122dsfdsfdsf"[random long weird named folder] and in "documents and settings/user/local settings/temp" :
1. Install malwarebytes.
Do a complete system scan, fix everything. Uninstall it.
2. Now install Spybot , run a complete system scan and fix everything. Install it's HOSTS list and SD Helper, no need to run it's TeaTimer service/run-time protection.
3. Install Spywareblaster, secure everything with it.
4. Install Avira-Antivirus with PC Protection and Internet Protection.
The above problem will keep on reoccurring so instead of performing customized correction install the above apps and run them all in safe mode while fixing stuff. Periodically clean temp files using CCleaner.
I've observed one more thing, the spyware/virus/trojan downloads only in Firefox and IE.x and NOT in OPERA or CHROME.
Disable system restore, the spyware/virus/trojan has created it's own copy in the system restore folder
, disable the service permanently. The spyware/virus/trojan is a known backdoor/key-logger, so removing it is very-very essential so as not to compromise your passwords. KEEP UR AV'S UPDATED, Malwarebytes is the best protection and healer but it's not free
for Home users.
P.S. - the file you found infected was svcnost.exe and not svchost.exe
.