Desperately need help, fail to start

Yesterday my sister got the comp infected with a virus, IEXPLOREi.exe
And that was the last time the comp was able to do anything at all
She said that as she was browsing, suddenly the task bar disappear and there is this error keep popping up. "There is no disk in the drive. Please insert a disk into drive \Device\Harddisk3\DR3" and I wasnt able to launch anything at all, not even taskmgr (The choice disappeared from ctrl alt del and so did ctrl shift esc)
So I decided to restart and do a sys restore
However when I rebooted, nothing shows up at all after the welcome screen but the same annoying error
Win+R, ctrl shift esc, etc Not a single shortcut works but ctrl alt del which doesnt help at all (just logout)
Safe mode boot doesnt help either, it launches ok but again nothing shows up but the pointer
The worst part is, installation dvd shows nothing when I boot from it
The pointer is there but no menus whatsoever
The only thing working now is recovery cd which it says sys restore is off (I didnt!!) and yhat thete isnt a prob at startup
Im out of ideas
Any help would be much appreciated
I dont want to format my harddrive if thats the way
Although I can boot off a hackintosh I installed earlier to access the files on it, I still need a way to get it working
Ps, I have grub on a usb so I can boot off any iso if needed