I took your advice and disabled the java plugin. What kind of problems should I expect to encounter on different websites as a result of disabling java plugin?
Should I wipe my system and reinstall OS?
1.) No to low risk, it's actually the other way around.
2.) (Answering for Polonus. Hope you do not mind) A website with a BlackHole exploit cannot affect you if java or flash is disabled. You will not be able to view java content within your browser while it is disabled. As the vendor, Sun Oracle, rarely issues out-of-band patches for java, you may have to wait for the next scheduled patch in October.
3.) Go here and run these three programs: Malwarebytes, OTL, and aswMBR.exe. Scan logs will be produced and attach all logs here in your next reply. Here: http://forum.avast.com/index.php?topic=53253.0
A volunteer malware expert will be along to assist you shortly.
BTW, since Oracle seemingly will not give out-of-cycle patches, I do not run or have java on my system. One less thing to worry about.