The program you mention is almost certainly spyware.  It is a key recorder and screen capture utility that monitors all that you do.  First thing to do is to scan your pc with Ad-Aware or Spybot and get rid of it.

Per many posts in this forum you MUST have anti-virus protection, anti-spyware protecton and a firewall.

Thanks Starman

I Have run Spybot and 'fixed' the findings, and I also have Norton AV and Zone Alarm which are kept up to date - still have the problem though.

The file seems to be a favourite virus target, so much so it is difficult to determine what your version is involved with.  You may have noticed this file is similarly named to rundll32.exe which is a genuine file.  Presumably done this way to disguise it.  I found a link for restoring the rundll32.exe, which in XP is in the Windows/System32 folder.  Unfortunately the author mixed run32dll and rundll32 apparently in error (talks about run32dll but the install instruction is for rundll32).

http://www.winnetmag.com/Windows/Article/ArticleID/38306/38306.html

"You might receive such an error if the run32dll.exe file is corrupt or if a virus (e.g., W32/SirCam@MM) is present on your machine. To correct the error, begin by ensuring that you have an up-to-date virus checker and perform a full scan of your system. Next, to restore run32dll.exe, insert your XP or Win2K installation CD, then go to a command prompt and type

expand \i386\rundll32.ex_ %Systemroot%\rundll32.exe 

to extract the version of the file to your system. After you extract the file, restart your machine."

I suggest:

1. Establish the location of run32dll.exe using Search in the Windows folder (and subfolders).
2. Search for rundll32.exe using Search in the Windows folder (and subfolders).
3. If rundll32.exe is missing try to restore using the above command line fix - it is a file you need.
4. Look to see if run32dll.exe is deleted.  If not, change the extension to say .bak to sideline it.  It may not be possible as it is posing as a system file.
5. Try working with a number of applications to see if they run.
6. If all is well, after a few more reboots to be safe, delete the .bak viral file.  If your pc is infected and NAV is not detecting it, the file will almost certainly reappear.  Usually there is a registry entry that reloads the viral file.

Have same problem. Effects Roxio and Adobe Photo Deluxe. Can work around it by TaskManager / Processes / highlite Rundll32.exe / click End Process. Warning window / click yes.You have to do this each time you start the computer. It works and the computer is faster.     In the reference command prompt to restore rundll32.exe, what are the symbols on each side of Systemroot? How can I duplicate them? I would like to give it a try with my Windows XP cd if it will solve the problem permanently.    note: Norton Antivirus is not detecting a virus.  

%System% is a generic term, quoting Norton:

%System% is a variable. By default, this is C:\Windows\System (Windows 95/98/Me), C:\Winnt\System32 (Windows NT/2000), or C:\Windows\System32 (Windows XP).

If NAV is not finding the file, use search to find occurrences of run32dll.exe and then scan the file or folder manually with NAV (Scan for Viruses/File alternatively Folder).