Windows crashed after VIRUT virus, need help

[Queesy]

Ok, so just got a new computer, working great and custom built from a friend. Found a Virut Virus when I scanned with AVG antivirus. Suddenly every program was infected, forced me to restart.

Then the login screen comes up but looks different, it asks me to login so I do but as soon as I login it shows my wall paper then it says logging off and brings me back to login screen.

After talking to a few people they said i need to reformat and reboot Windows XP.

(running abit mobo, windows xp pro SP2)

I changed the bios so that
1st priority is CDROM
2nd = harddrive <--sata
3rd = floppy (I dont have floppy installed)

so after abit screen comes on, the next is a black screen, and it says

BOOT FROM CD:
Booting from CD press any key to continue...

so i press a key. but then no blue screen pops up it just starts loading windows and brings me back to login screen.. can anyone help me?!? starving art student here, i poured alot into geting this comp done (about 600 was all i had!) to take it to a repair placee would cost me $130, and i jsut dont have that kindve cash.

I have 3 copies of windows xp
1) windows xp pro SP1
2) windows xp pro SP2
3) windows xp pro SP2 student edition.

I tried all three! few of my friends said it might be your drive, but drive is fine and blinking when i start the computer, however it does stop blinking once that screen comes up saying its booting from cd.
another friend also said it might be the keyboard since that screen that says press any key to continue and nothing happens, however i think they keyboard is fine because i used it fine to edit bios. I tried PS2 and a USB keyboard...

please help if you can, thanks in advance guys.

 

[Cinders]

Go back into the BIOS again and make sure the first boot device is your optical drive. Make sure to save the settings on exit and reboot. Hit the space key when you get to the boot from CD-ROM message.

All is not lost if your computer will not boot into your optical drive. Take your CD-ROM drive out and make sure its jumper is set to master. If you have any other drives of any sort on the same cable, take the other drive off, and try booting again. If that doesn't work then we need to see if any nasty is interfering from your hard drive. Turn off your computer and unplug the SATA drive. Try again to boot into the CD-ROM, yes, without the hard drive present. If she boots then you know that you somehow need to clean your drive before you reinstall. If it still will not boot into the ROM then your drive is probably broken, because booting into your install disk is a quick test for checking for a broken optical drive.

Borrow a friends optical drive as a last resort.