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Originally Posted by n0nsensical
That is a common worm (aka virus) exploiting a Windows security hole. Using the ethernet card won't help, you have to patch and remove it. I highly recommend setting up a firewall too. Connecting an unpatched Windows box to the internet without a firewall or at least behind NAT will get it compromised in minutes these days.
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n0nsensical speaks the truth.
Before you connect to the internet and since this is a completely unpatched system it would be wise to enable the windows firewall until you get everything else set up.
To fix the problem,
Microsoft has a tool to fix it.
You should run Windows update as soon as possible, followed by the installation of a firewall, some anti-virus software and, for good measure, at least two different anti-spyware programs. Because, again like n0nsensical pointed out, an unpatched and unprotected pc will be compromised pretty fast.
By the way, what's the problem with the floppy disk drive?
Edit:Oops, I forgot to add, congrats on getting the system up and running. What was the hardest part, do you think?