In order to create/place files in the systems folders and create registry entries you need permissions.

Whilst browsing or collecting email, etc. if you get infected then the malware by default inherits the same permissions that you have for your user account. So if the user account has administrator rights, the malware has administrator rights and can reap havoc. With limited rights the malware can’t put files in the system folders, create registry entries, etc. This greatly reduces the potential harm that can be done by an undetected or first day virus, etc.

Check out the link to DropMyRights (in my signature below) - Browsing the Web and Reading E-mail Safely as an Administrator. This obviously applies to those NT based OSes that have administrator settings, winNT, win2k, winXP.

Some of this stuff may also have been the result of a downloader. So what is your firewall ? It should have been a line of defence against this stuff if it has outbound protection, which XP’s doesn’t.