Inspiron 1545 - Need help with trojans and worms and what is the next step to do!!!

My friend purchased his laptop 3 months ago and he was on a website when his whole laptop went black and turned off. It eventually turned itself back on but once it started up Security Tool came up telling him he had 50 viruses, including worms and trojans. I have an Inspiron myself so I went to take a look. His Security Tool I am not totally familiar with as he has Windows 7 and I have XP. My Dell came with Trend-Micro PC so whenever a security alert comes up I am able to just quarantine it. When Security Tool asks him if he wants to quarantine it and he clicks yes, it then tells him he has to pay for it. Is there no free software on his laptop that would help him clear this virus up? Constant windows pop up about the viruses so it makes it virtually unusable. Will he have to take it in somewhere and have it fixed? Dell Support said something about charging $129 + tax to fix it. Is that something he should do?  Also, he had McAfee on his system but he still got the trojans and worms and when he called and asked them for help they said there was nothing they could do now that he had the viruses. Any help on this issue would be greatly appreciated! Thanks!