To update, I got system file checker to work but that didn't fix anything. Also I did a virus scan of all drives, and that came up with a hidden virus file (download.trojan) that I deleted. I also followed the steps from Symantec to remove the virus in case the computer was actually infected by it. However still no success.
I have now installed and am using Netscape successfully, however I still cannot use windows update and I would like to use internet explorer rather than Netscape.