did you type reformat C: or format C: ??

Throw in any windows 9x/me cd, and boot it, get to a console and type 'format C:\ /q /s' or which ever switches you like...

Dont know about Windows ME, but im sure you could just install over the top of your current install to fix the files, thats if you dont want to format, and you actually want ME on your machine...

Other than that, if you havent already, i dont see why it would hurt to throw a linux distrobution onto the machine to check-it out...

just my opinion