Formatting C: plus other problems

[Tvmorbid]

[font=\"Verdana\"][color=\"black\"]This is the worst PC screw up I've ever seen lol
A friend of mine has screwed his pc up good and proper. From what I can tell he orginally had Windows ME on there (not a good start) and decided to upgrade to XP. In doing so he just installed XP over ME without deleting the original partition, so when he started his PC he would always be asked which OS he wanted to start with, Windows XP or one which just said Microsoft Windows.
He decided to try and remedy this by formatting the C drive (or so he thought) and reinstalling XP. I have no idea what he actually did at this point but he reinstalled XP and now when he boots the PC he has a choice of 2 XP's and a Microsoft Windows lol
It also looks like the tried his hand at a bit of noobish hacking as it seems his copy of XP is abit dodgy in that he could not activate it legally, so downloaded a crack that was supposed to do it for him.
All seemed to go well as when he applied the crack Windows told him that XP had been activated. However, 30 days later he turned on the PC and lo and behold! Windows wants him to activate! The problem is that when he clicks the Yes button to activate Windows it comes back saying that Windows is already activated, it then takes him back to the Windows login screen and when he clicks his profile, the thing happens! It's a never ending loop!
Now he has approached me for help. I have a little knowledge in the usage of computers but not a massive amount. I've told him that the easiest way to sort this is to format the C drive entirely and start all over again. Unfortunatly this isnt as easy as it might sound. I know the best way to do it would be to boot from an XP disk and got to the repair panel and do it from there. Or to boot from XP and just delete the partion that all 3 OS' are on. For some reason though his PC wont boot from CD, when I change the BIOS to boot from CD the only thing that happens when I start the PC is a message asking me to insert a BOOT diskette :S I'm stumped here, any ideas?

Oh and hi everybody! http://images.thetechguide.com/forum/public/style_emoticons/<#EMO_DIR#>/biggrin.gif\' class=\'bbc_emoticon\' alt=\'\' /> My first post yay![/color][/font]