That works for me, too.
There's an easier way than formatting the hard drive, and you won't lose all your documents.
Boot up on a 98 boot floppy.
Get to the DOS prompt.
Type "C:" without the quotes and hit enter.
Type "deltree c:\windows" (again, without the quotes) and hit enter.
Answer yes to the prompt and hit enter
There. All your problems are solved, and the "My Documents" folder is safe and sound.