unplug from the net; disinfect your computer; get a better firewall and anti-viral program; reconnect; change all your passwords and logins; cancel all your credit cards and get new ones

What sort of firewall are you running? Firewalls are your first line of defense. I have one on each computer and another on my router. Properly configured port-blocking is ESSENTIAL to preventing such an attack.

Second, what sort of anti-virus and anti-spyware are you running? Not all of them are created equal. Chances are that even if you put up a decent firewall now, there have been enough changes to your system that they have a back door.
I get a little pop-up any time someone or something attempts to alter my Registry. Clicking all of those "Allow change" buttons is annoying when I go to install stuff, but it beats the alternative;leaving my ssytem wide open.

You may need to do a clean re-install to totally undo the damage in case he put in a back-door, but you DEFINITELY need a better firewall.

Shut off the internet, he has no way in without internet then do a system restore back to a month ago or so just to be sure or reformat.

order a restoration disk from the company that makes your computer, go to the bias settings in system control thingy, reset the boot sequence to boot the CD disk first while the disk is in there, then the system restore should come up and it's all gravy from there. i dont know if your boot sequence will be set back though, you'll probably have to reset them. it sounds long and boring, but once you have the disk its golden.

download and run combofix
www.combofix.org