It doesn't stop the executable files from running, it simply injects itself into them, they'll run just fine, but each time you run an infected file, it refreshes the virus, and the virus itself is probably the one preventing antivirus software. It's not so much a virus as a worm, since it replicates itself relentlessly.

You're most likely thinking of one of the fake antivirus variants(Conficker worm), which do exactly what you say, they stop you from running specific programs, cause redirects, use random filenames, and reset themselves if you attempt to manually remove them while they're running. While they have the same symptoms, one causes permanent damage by modifying files, the other simply runs as excess baggage.

Post has been edited 1 time(s), last time on Oct 16 2010, 3:45 am by Falkoner.