Recently I was doing some family Windows tech support. We had been given a laptop and I wanted to square it away so my wife could use it and pass on her current laptop to one of the kids. So it was the usual routine - uninstall lots of stuff, run Windows Update, install Open Office, generally make it safe for humanity.
What puzzled me was that I didn't see another process in the task manager; there wasn't a proxy service or something like that running. Then it hit me. Blocknsurf must have modified Chrome. It must have wrapped the Chrome launcher, or one of the executables or DLLs so that when launched it would include the blocknsurf code in-process. Perhaps it automatically loaded an extension and hid it from the extensions list; that would have been consistent with the observed behavior.
The fix was to simply uninstall Chrome and then download and reinstall it. With the new binary in place, all was well; no more blocknsurf ads!