http://www.symantec.com/home_homeoffice/security_response/writeup.jsp?docid=2007-070514-0712-99&tabid=2Have fun.
Sounds like it's of Chinese origin.
"~~~Bloodred~~~owns~~~you~~~xoxo~~~2004", so that only one instance of the worm runs on the computer.
xoxo

Chances are, you will need to reformat, because even Windows back up copies (C:\i386 or C:\WINDOWS\ServicePackFiles\i386 and C:\Windows\system32\dllcache) are corrupted by the worm.
Maybe
sfc /scannow command will work... have not tried yet. You need to boot into DOS. This method requires the Windows CD.
Note that
sfc /scannow only repairs or replaces Windows files, it doesn't help repair all your corrupted programs. Reinstall them is the only solution.
Edit: corrected minor errors.