sounds to me like you got your butt social engineer'd. It's something I've only seen recently, and is quite effective.
1. Exploit (usually Java, Flash, or PDF currently) creates a temporary file and has enough permissions to scraqe your registry for your installed antivirus
2. it creates a fake popup using your antivirus's name, but 9/10 it doesn't look like a popup your antivirus actually gives (one example of this I've seen actually did a good job impersonating Microsoft Security Essentials, though)
3. Clicking anything in the popup actually gives the the executable administrative permissions, which then makes it creep all over your system
lesson of the story: AV popups are not as safe as they used to be even when it says the same name as your AV, make sure you are actually looking at your real AV, launch it from the start menu.
As to what you should do now:
1. Disconnect your infected computer from the Internet
2. GET INTO SAFE MODE NOW
3. Get http://www.malwarebytes.org/ on your PC if it isn't already on there. Only connect to the Internet long enough to download it and install any updates
4. Do full scan after full scan after full scan until it comes up clean, then reboot and scan once more in safe mode until it comes up clean, repeat until it comes up clean after a reboot
5. Boot into normal mode and scan again with Malwarebytes until it comes up clean.
6. Scan with some other stuff to be extra-sure. My favorites are http://pack.google.com/intl/en/pack_installer.html and http://www.emsisoft.com/en/software/antimalware/ and whatever AV you got installed.
7. Finally check your hosts file for any unwanted entries and clear out your DNS. Also delete any cached and temporary files and hope the virus didn't mess up your install much (sooner it is caught and dealt with, the better)
Now for the future: Disable any browser plugins you aren't using. Does any site you visit use Java? No? Then disable the browser plugin. Install Flashblock to keep flash from instantly running and consider replacing Adobe Reader with an alternative PDF reader program. Doing that will eliminate the 3 biggest threats to your computer.