Yesterday I was hit with this virus, I searched on internet on how to remove it and following is the way which worked for me
You should do these steps after a fresh reboot or in safe mode.
1) Navigate to the problem drive(s) via the Explore option.
2) Click on TOOLS -> FOLDER OPTIONS
3) Click the button which says ‘Show hidden files and folders.
4) UNCHECK the following boxes:
Hide extensions for known file types
Hide protected operating system files
5) Find and delete the autorun.inf file and the resycled folder on the root directory of all affected drives.
6) Run Regedit
7) Make sure you are at the very first entry of the registry hive. Then click EDIT -> FIND
8) Search for “boot.com”. If it finds an entry, delete it. Keep hitting F3 until you’ve deleted all instances of boot.com in the entire registry.
9) Scroll the left column back up to the top and highlight the My Computer again at the top of the registry hive.
10) Click Edit -> Find again and search for ‘resycled’ and repeat as in step 8, deleting the entries as it finds them.
11) Close registry editor restart the PC. It should be removed.
References
http://uk.answers.yahoo.com/question/index?qid=20080920162650AAxfpKz
http://www.precisesecurity.com/blogs/2008/09/20/resycledbootcom/
http://www.experts-exchange.com/OS/Microsoft_Operating_Systems/Windows/Win95_3x/3.x/Win3x_Setup/Q_23743383.html
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