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How do I get these viruses off of my new laptop, and get it back to normal?

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I started up my laptop, and then all of a sudden the desktop background changed and said "Your PC is infected!" Then, "system tools" keeps popping up running scans, saying I have 30 infections/viruses. Trojans, spyware, malware, etc... then it wants me to pay like $60 to register and remove the viruses. :/

I have AVG already, so what happened? How do I get the viruses off! It won't let me get on the internet or anything (I'm on my desktop)...I even tried to uninstall some recently added programs that may have caused it, and it wouldn't let me. The "system tools" thing kept popping up. I don't even know what that is, and I didn't install it.

Also, I tried to go to "system restore" and it wouldn't let me. I'm not great with computers, so I have no idea what to do. This is a brand new laptop.

Here is some information about my laptop, if you need more let me know: Brand: Toshiba OS: Windows 7