Member Panel

Then we will have to find and delete them manually ,can you have a look how big the "local settings" folder is and how many files it holds? (rightclick on the folder and select properties.)

C:\Documents and Settings\Administrator\Local Settings = replace "administrator" with the name you use to login.

This could take forever - I didn't realise it counted the files one by one lol. Getting close to 130,000 - so I imagine I won't have a result before tomorrow. :-(

You don't have to let it count them all , i didn't think about how long it would take windows to count one million+ files , just knowing that there in there is enough. In an I.E. window , can you go to "tools"/internet options then on the "general" tab under "temporay internet files" press "delete files".
After that have a look if the million+ files are still there.

Did that - it's still counting so I guess they are. I'll start a virus scan to be sure though.

Try this , delete everything inside "C:\Documents and Settings\Administrator\Local Settings\Temp" and everything EXCEPT the "content.ie5" folder from "C:\Documents and Settings\Administrator\Local Settings\Temporary Internet Files" and then everything EXCEPT the "index.dat" from "C:\Documents and Settings\Administrator\Local Settings\Temporary Internet Files\Content.IE5".

Hmmmmmmm - well - I managed the first part except that PAV2 wouldn't delete - it's Panda and is running at the moment.
Second part - only contained cookies - no sign of 'content ie5' folder.
Third part - ditto.

Looks like I'm missing some folders.

Create a new user, that way all your folders will be re-created and the problem may disappear.