Fearless, like I said, I've never had a virus so I'm sort of inexperienced. I've had a few scares so all I know how to do is the bare minimum. I dunno what version of Norton Antivirus you have. I have 2001, which I hear is far superior to 2000. I only have one cd so that tells me you probably have a different version. I recommend you get together about $60 and go get two things, Norton Antivirus 2001 and Norton Utilities 2001. Best money I ever spent on my pc, non-hardware or game-based atleast. Utilities is worth Windoctor and Speed Disk alone, defrags in 10 mins.
On the whole back up/reformat thing, you should try to do as much as you can to clear the virus out first. If it turns out to be futile, then back up everything that's important. After you reformat and put Norton on a virus-free system you can scan the backups from the cds to see if they're infected. Also, don't forget to go back into your setup and change your boot devices back. Removable should be first, HD second, cd and misc last. Good luck bro, hopefully someone that knows more of what they're doing will see this thread.