everything including my os is wipred out and it wont let me install

Okay, so I had a pretty nasty rootkit which I had moved to quarantine with avast, and since we were moving stuff around I wasn't able to actually get back onto the computer to remove it properly. Today i decided to do so, but it wouldn't even let me open up avast and it wouldn't load my desktop icons or toolbar or anything right. I tried going into safe mode, but it just froze up. so I put in the XP Recovery CD (that computer originally had 98 on it, but I had upgraded quite a few months ago to XP) and go to recover and try to repartition/format the harddrive. well apparently everything got wiped out, cause when I went to reboot it said it couldn't find an operating system...so then I put the XP CD in to go to install, but the problem I have with it is, it wont read the f8 key for me to agree to the terms or whatever.It read the f8 key before to go into safe mode and stuff, and it will read every other key....thats not an f one...

I thought maybe I could try to put 98 se back on it, and when I go to do the install part it like starts it but then tells me I don't have enough room on my harddrive......if everything magically wiped out how can i not have room?

i'm able to get in the bios and that's about it....but I don't know if theres something I can change in there that would make the f8 key work or something? I have no idea. And I can't afford at the moment to take the computer in, so i have no idea what to do. is there anything i can do?

I don't know the info you might need to help me, but its an HP computer and the bios thing says PhoenixBIOS.

Any help is much appreciated. And sorry for any typos...I'm on a laptop with a dead backlight and I'm having to use a lamp just to see the screen somewhat and its not that great.