Ok, so it's in your Users/HOME folder.
So, I'm going to try to restate all this, and maybe we can get to an "AHA" moment, soon.
1. Your Safari got hijacked by a site that claims you have won a prize.
2. None of the menu items work now in Safari.
3. The probem persists in Safe Mode, and after reinstalling Lion.
4. In a New User, Safari is fine.
5. To date, you have taken to the desktop:
Home>Library>Preferences>Safari plist
Home>Library> Entire Safari Folder
Home>Library> Cookies & Caches
(Tony, this is crucial. You got to the HOME folder with the great instructions given by kisuke3, right???? You did not go to the normal Library folder, HD > Library, right?)
Before we go too much further, have you started Safari from the Applications Folder yet?