I think that if it was the ISP, there would probably be a world wide riot, especially if that ISP was Yahoo. So no, I doubt very much it's the ISP using virii. Is the XP Home disk you're using legit? It sounds to me like the viruses being installed are from one of the programs that are being put on there from the start - if the disk is a copy that he download/got, that could be the problem.
If not, then I suggest reformatting, installing XP, and then using the Norton as a boot disk to clean any infections before you boot up (to do this, simple start up the comp with the Norton disk inserted, and continue from there). Other than that, download programs like Ad-Aware and Spybot Search and Destroy, both good for cleaning any little programs that shouldn't be there. Also - always update Norton too - if the Norton isn't up to date, then it can't keep you protected from new virus and trojan threats.
Hope this helps.