I am by no means computer smart, though do know a little bit. This problem has been going on for a while now. I was on the computer when I started getting these virus warnings, and I attempted to run AVG and remove the problem, but it seems I was too late. I tried restarting the computer to an earlier date, but it said that their were no earlier restore points. I cannot open anything in the control panel or even my desktop properties. I constantly get this system32\rundll32.exe pop-up.
I'd appreciate any help I can get. Where do I start?

Read the instructions in my signature about posting a log in the HijackThis forum. Copy/paste or link to this thread to describe the problem, and somebody there can help you with malware removal.