I have scanned my PC (xp sp2 ) using avg spware and it shows Dialer.BT.c i use avg antivirus and spybot as well. It gives Dialer.Bt.c  a high rating, can anyone tell me what it is. Also my pc keeps freezing, then carries on as normal after a few minutes. When starting pc it goes to a blue screen sometimes and does a scan. As you see i am not well experienced sorting problems on a computer.
After scan is finished it placed bt.c in quarintine.

Dialers are malware that uses your dialup internet connection, if you have one, to break your current connection and dial into and pass information to a remote server.

It sounds as if your Anti virus software has caught and quarantined it which is a good thing.

Unfortunately, in common with a lot of current malware, it may have the facility to reinstall itself at startup.

I'm sure the 'bright sparks' will advise further action if necessary.

Thank you for the advice.

Most of these dialers used to dial a hong kong number to connect to the internet instead of your proper number and the price was sill like£10 per min. I know a few people who had £1000 bills before they found out.

If you dont have a modem connected your basicly ok. Its worth doing a full system scan and also a free online one as well. If you have more than one user account do the scan from all accounts as it hides in the users reg so its not picked up unless you scan all users

Really? Are you sure? 
I only run scans from admin.

I did come across 1 person who had broadband but still had the onboard modem plugged into their phone line for sending faxes.

The malware they contracted configured and used this to dial out after midnight (they downloaded movies on the ADSL overnight).

I pointed out the error of their ways and all is well now.

Some of the dialers can stop admin scanning as it sets the permisions on the users profile to protect its self so you dont notice that its doesnt scan the users profile and of coarse off it goes again when the user logs in.

A tad worrying, and strange, bit the Dialer.Bt.c seems to be attached to BT openworld. I'd remove it completely anyway, because the BT openworld software doesn't need anything to run properly.

As for being a dialer, I also have seen BT phone bills of £500 in 2 nights. the last one I saw was phoning Western Samoa's premium rate number. But it might be how BT keep an eye on you. Just remember, Big Brother is alive and well, and working for BT.