What you have or had may be a new variant ...
First detected by Panda on 29 Dec 06 so yes, pretty new. Additional info can be found here
http://www.pandasoftware.com/com/virus_info/encyclopedia/overview.aspx?lst=vis&idvirus=143029&sitepanda=particularesCruzadas, according to Panda one of the symptoms is a rather non-specific "displays false error messages when it runs", so don't rush into a reformat.
You could try this to boot into safe mode:
> Click Start, Run and type MSCONFIG in the box and click OK
> The System Configuration Utility appears, On the BOOT.INI tab, Check the "/SAFEBOOT" option, and then click OK and Restart your computer when prompted.
> When you're finished open MSCONFIG again, on the BOOT.INI tab, uncheck "/SAFEBOOT" and click OK to restart your computer
Regarding the Security Center, you could check in HKEY_LOCAL_MACHINE\SOFTWARE \Microsoft\Security Center to make sure AntiVirusDisableNotify is set to 0. A value other than blank or 0 will disable this option (if you make any changes to the registry be sure to first make a backup, of course).
Also, if you don't already have a third party firewall this would be a very good time to install one.
There is a chance additonal malware has been downloaded so you will want to scan with AVG Anispyware, A-Squared, SuperAntispyware, etc. Post again if you need any additional help with this.
Oh and, btw, you probably already know that no antivirus, antispyware, anti-whatever is 100%. There will be times that Panda misses something another tool catches. Work on layered protection and safe practices rather than seeking perfection.