computer stuck in a restart loop,crashed when intsalling sp2

I have a emachine W3080 with AMD Athlon XP Processor windows xp home edition preinstalled service pack 1. I was trying to update to windows service pack 2, halfway through the installation I got a message saying some file was missing, I dont remember wich one, service pack 2 couldnt install so only half my computer was updated, so I went to remove programs to remove service pack 2, then it restarted it started to boot 2 or 3 sec later it will shut off and restart again. the computer is stuck in a restart loop. I tried using F8 and selected last good configuration and it still does the same thing I also tried starting in safe mode, but as soon as it starts to reboot it will shut off. The only reason I havent called the manufacturer is because the phone call will cost me more than the computer I think its like $60 for a half hour. Somebody told me to format THIS IS WHAT I HAVE BEEN DOING, I put in the recovery disk, windows set up comes up and it says,
to set up windows press enter, then i press enter then it says, set up cannot find the end user licensing agreement. So i skipped that and tried to repair windows xp installation using recovery console, i pressed R
then it said which windows, i pressed 1:c:\windows and then password, I pressed enter, and then the command prompt pops out, c:\windows> and I typed format and it looks like this c:\windows>FORMAT then I get ,THE COMMAND IS NOT RECOGNIZED OR THE PARAMETER IS NOT VALID TYPE HELP FOR A LIST OF COMMANDS, so I typed help and in the list I do find format I am not misspelling it or anything it just wont recognize it, what am i doing wrong? i cant even get it to format, ive tried using support gateway for more info on restoring my system. but i dont see that option of destructive or full restoration on the recovery console. oh and my computer is set up to boot from cd. PPPLLEEAASSE HELP
why does it say set up cannot find the end user licensing agreement ?