system.exe infection and nothing, (I mean nothing works)

I have a Vostro 1500 running Win XP Pro


system.exe error message keeps popping up. I think it is a Trojan. I cannot clean it from the machine. It bogs down Adaware, I can't install AVG or Avast on the infected laptop. I managed to clean it with Adaware, but it came right back. I found several mentions of Ending Process in Safe Mode, but this did not work. I tried to format the drive and reinstall windows, but it wont erase the partition with XP on it. Any suggestions?

Thanks

 

aahh... upgarde to win7
new install
format to ntfs

 

I want to stick with the XP. How can I format the hard drive. Keep in mind I want to be rid of this issue.

 

NEW INSTALL
reinstall XP via disk
delete partition
create new partition
format new partition

 

it warns me against installing the same OS, and at the same time I cannot delete the partition with the Old install on it?? Any thoughts on this???

 

PS, I was using my laptop to grade student work. Normally I use my Desktop for this. I run AVG on the Desktop, I assume that would have taken car of the problem had I used it on the laptop?

 

Boot from the CD and delete the partition. You can't reinstall Windows from Windows.

 

done already. thanks for the info. I didn't have anything worth saving sooooo out with the old and in with the new. I have some odd drivers that I may need to install, but otherwise ready for work.