Well, I did it!
As I said in my original post, I did disable all the security programs on my Dad's computer, and still the "Host File Locked" popup kept popping up.
I also uninstalled WinMx, then tried to install the patched version and still that little guy kept haunting me. Where it was coming from with no WinMx installed I couldn't figure out.
So what finally worked was installing WinMx in Safe Mode. I did disable the security programs before rebooting in Safe Mode. Not sure if that helped. But my Dad is so happy to be all updated with his favorite P2P program, and that's all that matters.
Thanks SamSeeSam for responding as quickly as you did. I do appreciate it.
Happy Downloading
BenJr