a mate has the virus "Downloader.Trojan".

see here:

http://securityresponse.symantec.com/avcenter/venc/data/downloader.trojan.html

he's restarted in safe mode, begun the scan but it keeps going "fatal error" at about the same point each time.

any advice appreciated.

Hard to tell what was downloaded and executed by the trojan. This might require a reformat and reinstall.

However try doing a virus scan from outside of Windows. If you need you can download a freeware scanner from here that will install to floppies and can be run that way www.claymania.com/f-prot.html