This sounds like the virus that I had the other week.
Mine did the exact same, but I managed to retreive all the important files before it did too much damage. Then I ended up using a fresh boot disk to re-install the system.
Can't you start the pc off a boot up disk?
I had a problem years ago, with a pc hard drive, I took it to a local shop and they just ued their spare HD to boot off, and got any files that I wanted off my existing HD, so it is poss.
Just make sure there no dodgy porn on there Matt.
