It looks like the software that runs a hardlock dongle: a piece of hardware that is used to prevent software piracy on certain programs. If you don't have anything like or connected to your compuer, you probably don't need it.
Yeah, that's where I was going after proving it was hardware related I'm still concerned that your wife had two trojans on her PC though. Have you considered putting a firewall on her machine? XP SP2 has a firewall.