The best way to remove a virus or trojan horse that cannot be repaired or deleted in Normal Mode (regular Windows) is by going into Safe mode with Networking, going to an online anti-virus website such as Trend Micro and doing a complete scan of your system. In safe mode, only necessary Windows processes are running, and trojans/virus/spyware generally are not, which makes it much easier to get rid of them.
You were correct to delete svcinit.exe, a trojan horse that logs your keystrokes. You should also delete all references to it in your startup files, including win.ini. You’ll probably need to edit the Registry as well as win.ini. DO NOT edit the registry unless you are experienced. To delete useless entries, use a program such as TweakNow RegCleaner, which will do this automatically.