[Paul K]

You may get away with booting from your windows CD and then choose to re-install, when it comes up with the installation options tell it to remove the windows folder and then you may lose all your damaged system files and windows files. When you re-install though, make sure you have a new copy of AVG or any other anti-virus software with up to date definitions to install and a firewall ready to run.
DO NOT connect your pc to the internet or broadband feed before those two things are installed. Disconnect the cable leading to the PC completely and do not plug it in till you are protected and are ready to get the necessary updates for windows.