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A quick search showed only a bit - looked to indicate that the file is part of a ugly - Vundo to be exact. Its a trojan, and the reason you can't find much on the dll is because it drops a random named one in the system folder. Yours just happen to be one that has been noted before.
I would suggest a good antispyware/virus package, updated and run first off. Then a reg cleaner to remove orphaned entries. If you still have issues, then yes reinstall the OS, but make sure you format the drive first (don't do a "repair").
Good luck.
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Good Hunting!
Captain Haplo
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