Your favorites and desktop icons are likely not gone, but your default Windows profile may have been locked during boot, causing the default to be loaded. Reboot the PC once again.
OneCare from http://onecare.live.com is a 90 day trial before purchase. You can remove it - How to Uninstall Windows Live OneCare
Since your problem began as an infection, and you are using Windows Live OneCare, but OneCare did not detect or cannot remove the malware, please contact support to report this and for help with removal.
How to reach support (FAQ) - http://forums.microsoft.com/WindowsOneCare/ShowPost.aspx?PostID=2421771&SiteID=2
If you are in North America, you can call 866-727-2338 for help with virus and spyware infections. See http://www.microsoft.com/protect/support/default.mspx for details. For international information, see your local subsidiary Support site.
I'm moving this to the General topic folder.
-steve