Virus issue

I'd be concerned how they were able to control the computer to begin with, the exe on the dropbox url is a second point of attack, the first point is that they were able to control it in the first place. I'd be looking to discover how the first point of attack happened, as clearly AVG did nothing to prevent that happening.

Boot in safe mode, bring up an MS Config window and see if there are suspicious processes loading during a typical Windows boot up. Malware/Viruses can hijack anti-virus apps, and i'd not be convinced AVG is protecting you, as clearly someone was able to hijack control of your computer the moment you were away. How that happened, would be priority number one were i in your shoes.

What browser are you using? Does it have any third party addons installed? And is your windows upto date?

EDIT: Reading that back again, this sounds like a browser hijack to me.
 
That does sound like a Browser hijacking session, if you were on an unencrypted network then someone could use certain apps (I know of one at least on Firefox) which allow them to intercept packets and hijack someone else's session. You can avoid this, mostly, by using an extension like Encryption Everywhere on Chrome for example.
 
Probably. Java is the most exploited web plug-in.

Do you need Java?

Use Secunia PSI to scan your machine for out of date software.
 
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Disable java in your browsers, you almost certainly don't need it (and you could always re-enable it temporarily if needed).

Java in browser is easy pwn.
 
Reformat and don't bother with Java. It's a security mess.

I have Java installed for Minecraft but only the 64-bit version, browsers can't see or use this as they're only 32-bit.
 
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