The hard part nowadays (although maybe not a problem in India) is actually finding a HUB. It is very difficult to actually buy a hub anymore, and most "hubs" sold in the US anyway are actually low-end unmanaged switches, so you can't sniff traffic on them.
In answer to the question though (I'm sure redundant at this point) is: YES- they are probably part of at least one bot-net, and are probably infected with all sorts of other nastiness. The best thing to do is re-secure the wireless router, and the all-too-often-recommended reformat and re-install of Windows. I wouldn't even try to salvage the current installs at this point.
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