Mark sent me a PM with a screenshot of what is going on when he tries to update spybot and I think you guys are right it is this vundo thing. I checked it out, it's a bastard.
For the techie types that may be interested, it works by using a Browser Help Object to snag requests to anti spyware sites and redirect them to localhost. This is especially evil because any spyware definition update that use a dll from the standard microsoft network package seem to be also redirected by the BHO.
Hijack This! is probably the best tool for getting rid of this kind of thing but like Snaz says it isn't exactly simple to use.
Mark, I'll put the Vundofix program from Atribune on my site and send you a link.
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