XP Installation: cannot copy .dll files (Service Packs 1 & 2)

Issue: Client's computer (infected with malware, spyware, autolaunching IE to foreign porn sites, etc) needed thorough cleaning and optimization. He expressed that data preservation was crucial, the single HDD was the only location for certain mp3s and photos.

Steps I've Taken: cleared viruses with clamav (using linux boot disk)
launched Windows repair with official XP discs

New Problem: Installation is stuck, cannot copy .dll files during stage 4 of installation.
Inserted Service Pack 1 and 2 upon Windows prompting, encountered same issue.

I have no idea if his data is still there, I CAN do a data recovery if necessary but that does very little to resolve the Windows installation issue.

I did check the cables, the RAM, the cds/dvds I'm using, etc.

Anyone got advice, or have you encountered this issue before?
The only logical solution I can think of is to run Trinity or GetDataBack and back up his data, wipe the drive, and reinstall... I'm not even 100% sure that will fix it, but I'd like to get feedback from those wiser than I before going through that process. (I'm concerned the issue will repeat itself even after the recovery). I'm hoping there's a simple factor I'm neglecting that you guys can bring to light...

System:
Acer TravelMate 2410
MS2177
2GB Ram
HDD Hitachi ATA/IDE (model IC25N060ATMR04-0)
 
Dude, step 1, cover your ***. It's not your fault that he has one single copy of critical files. His system is FUBAR, everything you do is under the expectation that the customer is clear that it's his own risk. Get this is written form if you can (email).

As for suggestions, I'd copy the files across to a portable HDD, then make sure all files are clean. Proceed to do a clean install of XP, because who runs SP1 ....

Then put files back to a fresh system.


Customer has two options:
1. Highly risky operation to attempt repair, will take unknown time, may not even work, high $$$.
2. Perform extraction of data, clean install. Fairly static time and $$$.
 
Copy (ie backup with intent to reuse) ONLY files from \Documents and Settings\UserLogin\* and let the system die. A reformat and full install is the only way to get a clean system now.

Once it's bootable again, rescan all the saved files from the above before attempting to move them to the new system.
 
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