Does Spyware Damage Windows Networking?

DerBryGuy asks: "I work for an ISP in Canada. Recently we have had a rash of customers whose computers can connect via DSL, but cannot browse, or often even ping. Invariably it turns out that there is some spy ware of some sort installed on the customers machine - usually New dot Net or the other drek that comes with Kazaa. About half the time if this is removed correctly (manually or by using ad-aware) then the machine will regain http access. However the other half of the time the only option we have found is to format and reinstall the OS. So I am wondering, are other ISP's seeing this? What do they do when they get a similar complaint and they detect spyware on the machine. Is there any recourse for the customer? I mean most of these people had no idea what New dot Net was when their kid installed Kazaa, and now they are stuck with a computer store bill for reinstalling their machine."