costa, from your description i dont think you would have the expertise to reinstall windows after format either.
whatever you did, its definitely a freakin virus, so here are what i think your viable choices can be:
1. buy a new computer (I recommend this, as it seems that your computer is quite old, with USB 1.0/1.1)
also that you should get vista with the new computer, its a lot more friendly for not-so-IT-savvy people
also download avast! or AVG and some firewall (like Commodo or ZoneAlarm) to protect your computer from now on
2. see a technician, pay about $100~150 to get it all fixed. (or find whoever u bought it from, but your warranty would no doubt be out)
it is viable to make backups, but when you put it on your restored/new computer, make sure you scan it first before you transfer ANYTHING. reinfection can be a major pain.