Windows 7 insanity! virus/spyware?

I've had an Inspiron All-in-one for over a month now. Everything was fine. Now, the icons are in the tool tray are popping up as continuos running lines of the icon for Microsoft Pen and Touch Input Component. An MS virus remover keeps popping up and insist I purchase it. I realize this is probably spyware. My desktop background is blue but the icons and tool tray are still there. It won't let me open anything and the internet is acting sluggish and weird. I purchased McAfee when this first began thinking it would remove it, but it won't let me open McAfee itself. The mouse is flickering back and forth from the blue circle to the arrow. I don't know if this is a Blue Screen of Death. I've never experienced it. What is this and how can I fix it? If it is a BSOD, I will follow the instructions for that. Is it safe to leave the computer on until it is resolved?