Wait until the disk boots up completely.
you should get 3 menu items.
Hit R to enter the recovery console
Hit enter to install windows
Hit esc to exit - I believe.
At this point Hit R. Then continue with the necessary steps.
You could try these steps to recover the registry files as it appears they may be corrupted.
How to recover from a corrupted registry that prevents Windows XP from starting
Your best bet is malwarebytes.
But the key is to scan your computer in safe mode.
The reason OneCare can't remove the virus is the virus is probably running on your machine currently and it can't stop the service.
If you boot into safe mode the minimum amount of services will start and you...