OK. you have me stumped, because my Emachine (T-5026 P4 WinXP) has "PC Angel" and it offers a non-destructive restore option. Starting @ "Press F-11 to begin recovery". Both methods load a fresh copy of Windows,, but coming from (my D:/ your "G:/), When the discs themselves are used, they rebuild the recovery partition and reformat. I have no doubt things could be different with your box.
The cycling problem you describe is a "My Computer" properties issue, where you have checked "reboot after error". Not your fault though. I'm pretty sure it's default is checked.
Sometimes a "Live CD" of Linux can be run off of the CD drive. The latest "flavors" of Linux are able to read "NTFS" Windows files. The OS doesn't install, it runs off the CD drive and RAM. You can try downloading a copy of "Ubuntu" Linux, then burn it as an "image" <very important!
http://www.ubuntu.com/getubuntu/download
In this case, you would insert the Linux CD, power down, then restart, following the options to "begin live session". I suppose you could pop the CD tray open cold with a paper clip, power off, but that seems a bit brutal.
I think you could try this with either computer, no harm or change comes to the host computer, if you don't install Linux.