by EscapePlan9 » Sat Jun 21, 2008 6:19 pm
With viruses, going back to system restore generally won't fix the problem because the virus has spread to so many different parts of the computer (registry, boot.ini, startup options, temp files, internet settings, host file, etc). If you're unable, even in safe mode to make these changes, you have some limited options. Beavis mentioned one.
Another is to get a minimal OS, like Bart PE, onto a bootable CD and boot to that. At work we do this often so we can "re-image" someone's computer to a clean slate (and load up our company's default starting configuration for computers), or to remove files we couldn't remove inside Windows. There's also a few "Ultimate Boot CDs" that don't require needing to load into windows to fix various issues, but you have to really know what you're doing because you can do a LOT of harm this way if done wrong.
That you can't even use the XP installation CD to format and partition the drives is incredibly rare unless there are hardware issues (viruses don't physically damage hardware like that). I would recommend taking the computer into a professional repair shop and having them look at it if you can't even get this step to work right.