Sorry for the huge delay...I've been pretty busy and today I am back and working on this Compaq PC.
Thanks for the suggestions above, however, I am still unable to execute any AV no matter which one I install. Installation process goes through smoothly but it's when I attempt the execute the program nothing and I mean NOTHING happens. Happens in/out of SafeMode. I messed up by not documenting the actual virus type etc. to get this rectified a little easier and quicker(lesson learned). All I recall is it was some kind of 'windows defender...something'.
Everything else seems to be working perfectly fine. It's just that one little detail. Any other suggestions?
FYI: I have scanned the drive(externally) with MSE and MalwareBytes which 'eliminated' the malware. Nothing unusual running under the processes or startup.
Edit: When I right click on any file in c: and select 'scan with microsoft security essentials' it thinks about it for about 8-10 seconds and before getting "Microsoft security essentials cannot scan the selected file(s)."