Ack, I had to help my Dad remove one of those fake antivirus/antispyware programs a few months back from his office PC (he's a one man business renting a single office room). It was a feckin' nightmare. He's still running XP which is fine and dandy as he's got some ancient software that he doesn't want to risk on a newer operating system. In the end I used something called BartPE to kill it off. I used this a lot when I was doing my own "business" a few years back supporting comuters and networks in the local area and it's a life saver. Bit fiddly to get a good copy working but bloody handy too.
Not sure whether there's a version that'll work for Windows Vista/7 so it might be in the obolete bin a little bit these days, but perfect for the XP machines still hanging around.
Next time he kills his PC though, I'm going to tell him it's broken and he needs a new one. He's been saying he'll get a new PC for two years. Just worried about the funny little tools he uses...