First, do not panic. XP Antivirus 2008 is a fake anti virus program which fakes people out into installing it by pretending to be helpful rather than malicious. Just go to:
http://www.xp-antivirus-removal.com.removal-instructions.com/removeXPAntivirus.html
and they will guide you through the complete process of getting rid of it.
Someone probably thought that they were being helpful and clicked on a message in your email, or someone who shares the network with you. You should think about running a software firewall of your own, as well as an anti virus program of your own. You should also have a spy-ware removal tool and a registry cleaner. The firewall and the anti virus should run all the time, and you should run the spy-ware removal tool and the registry cleaner, as well as defragmenting your hard drive periodically.
You can get all four programs you need for free, without sacrificing quality. I use PC Tools Firewall Plus Free Edition, Avast Home Edition, Spybot - Search & Destroy, and TweakNow RegCleaner Standard which are all available at http://www.download.com/. You can use the standard defragmenting utility that is part of Windows. It is not fancy but it does the job.
After you get your system cleaned out from it's existing virus, install the four free-ware programs (or a commercial program if you want to). The firewall and the anti virus programs will run in the background and you will only have to deal with problems. I clean my disk of spy-ware, clean the registry and defragment my drive every Sunday.
If you keep your system cleaned, you will find it easy to stay up and running. This program was probably opened and installed by someone on your network, or someone that someone on your network shares files with. It is a good example of why you never share your computer access and a good example of why you never open files unless you both know and trust their source.
I know a lot of people who use P2P file sharing programs (like LimeWire or any of the Torrent type files) for "free" music. Aside from any copywrite issues, These programs can provide a back door into your system. Same for chatting programs. If you must chat, use a system like Yahoo!'s that has provision for protecting your system. I am paranoid enough so that I won't even let anyone that close to my system.