How to recover my PC?

This morning I wanted to install the software Alcohol 120%, which is a CD and DVD burning program. I wanted to create a CD with pictures of my recent vacation to Prague and it was highly recommended, so I downloaded it.
When I started to install it, it said that I should restart my computer to finish the installation, and I figured that a lot of softwares requires this, so what should the problem be?
When my computer did the restart I was shocked, because it said that it needed to recover.

I got the chance to either start my computer normally or start a repair session, and I just thought my computer was acting weird, so I clicked "start normal", but it still ended up trying to repair, telling me the reason was a fail in upstart.

It ran for some time saying "checking for fix for problem, and will not delete or change personal data" and then it ended up saying that it couldn't fix the issue. I could check the "detailed information", click "finish", which would just shut down my computer, or I could go to "Advanced System Recover", but when I tried it told me to log in as one of three users, and I only knew one of the names, as it was the one for my Administrative account, but it told me my password was incorrect - no matter what I typed. I literally tried every known password I have ever had.

I have tried running the session 4 times total, and nothing have helped. I have sent the information to Microsoft, but I don't know what that would do.

The only difference I have experienced was when I inserted my external HD device by accident, and the session stopped, telling me that an input had caused the session to stop and I got the option to restart once more.

Whatever can I do? Please help, as I really need this computer and have no idea how to access anything... I one other PC at my disposal, but it is a stationary one. The only notebook I've got is a Mac, if that changes anything.

I do not have any form of Recovery CD, as I have searched everywhere for it and I'm fairly certain I never had one in my possession.

Thank you in advance, and I really hope that you'll be able to help :)
Additional Details

For some reason my computer does not have the F8 option upon startup. I can click "Delete", "F11" and "F3", but that only gives me the option to restore the computer default, causing everything to be deleted, or change some confiqurations or change the BootUp driver or something. I have tried every option. Nothing helped.
Now I have restored the settings to default, but the problems still remain. The only thing, which I haven't done is delete everything, but I would rather not have that done...

Work through these steps for Troubleshooting Windows 7 Failure to Start which try everything necessary and possible to start Win7, then if necessary rescue your files to run Factory Recovery or get the superior Clean Reinstall.