Dell Demension 8400 tdidis32.sys???

Ok yesterday, I started my comp for it to go to a blue screen of death. I feel that I’m pretty good with comps, so anyway I restart after blue screen. I get to the windows xp logo and after that the screen just goes black and does nothing. So I ran a diag on hard drives and I have one hard drive from dell the 160 GB that come with the comp. That one passes the diag test and then I bought a WD 320 GB internal hard drive and when I diag that it gives me a fail response and code 7.
SO I’m pretty sure that this Trojan I have has corrupted a registry file during start up. FYI the operating system is installed on the 160 GB drive. So i unplugged the wd 320 drive and system responds different it goes clear into the startup and after I put my password in you see my desktop and then of course blue screen with error message tdidid32.sys I know it’s a Trojan. So I got frustrated and tried to install a fresh copy of windows and when I do that it says it does not see and hard drives available. WHAT DO I DO?