If you have formated the drive and the problem persists, try the following:
First, check your BIOS to see if there is a BIOS anti-virus program protecting your boot sector and preventing re-install. If so, turn it off.
1. From DOS type: FDisk /MBR
This should format the disk and the master boot record. Try re-installing.
2. If that fails, try using something like the UBCD4WIN boot disk, or the Killdisk:
http://www.killdisk.com/ write zeros to your entire drive. You will have to then set your C: drive to active using Fdisk. Then try re-installing.
If you have other partitions, you may have to clean them also, since the infection could easily reside on them. If these still fail to restore your hard drive, it may be damaged.