Yes I am looking to detect it. And eliminate hopefully.
It will be software related not physical.

Thanks for the suggestions. The site you linked me to was informative and made me a bit less paranoid.I will look into rootkit detection. I see RootKit Revealer is on CNET so that will be my first try. 

I've already installed and ran Ad Aware Free and am thinking about Avast Free for anti virus. What are your thoughts about those?

Do you have a suggestion for a free firewall?

It's actually not a very exciting story. Talked to a few people online. Was sent files. Clicked to open. Computer started acting weird. Eventually gave a warning that a keystroke logger was detected (windows firewall) and here I am.

I was wondering if anyone can recommend any anti-keylogger software.

Preferably free.

Thanks in advance!