This thing sounds like a pain. If you search for BitDownload spyware on Google, you'll see other people have had probs with it too.
Yahoo! Answers - What is exactly the bitdownload?
Getting rid of Bitdownload - Security Cadets Forum

Try AVG Free AV...that should help but I'm not sure if it's going to completely fix this for you. Other people have been infected with a worm which changes file extensions to .exe or .zip but you've got the BitDownload thingie as well!!
AVG Free Advisor: AVG Anti-Virus Free

Download AVG, update it, scan your computer.
Search the forum & you'll see other people have had this zipped files problem...AVG has helped
I'd also run some antispyware apps, these ones are all good & free.

Spybot - Search & Destroy __(FREE)

AVG Antispyware (formerly Ewido)

Ad-Aware SE Personal (free)



If you need more help, try one of the sites below. They'll be able to give you more specialised help.

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SpywareInfo Forum FAQ - SWI Forums

Sad news is that you've probably lost your files, unless you'd backed things up before this happened.

Always make sure that you're using a good AV program. Keep it updated & scan all files that you've downloaded before you open them. There are many infected files on the network.