Remove virus and spyware without reformatting harddisk

It's really a big challenge to cure a PC system without reformatting the harddisk, but that's what I spent the last two night to work on in order to cure my teacher's computer system. She has a system with the following configuration:

- Hard disk: IBM NetVista A60i (6832/6833)
- CPU: Pentium 4
- OS: Windows ME Traditional Chinese edition
- Memory: 127Mb (DIMM)
- No illegal software in the machine (: >)

After a few attempt, I conduct the following steps and have most of the system problem resolved:

1. Boot from a Super WinPE plus 2004 disc (SA-530) (a WinXP OS bootup from a CDROM)
2. Run the virus application on the WinPE OS.
3. Boot the WinME OS as normal and continue scanning and removing virus/spyware using AVG Antivirus, Spybot search & Destroy 1.4 and Adaware 1.6 SE.
4. Run Windows update (which previously I couldn't deal to the virus), and apply all the critical updates.

Unfortunately by the time I get to step 4, I already spent 4 hours on the system. So I have to leave (I needed to work the next day). But at least the number of virus was down from 8000 to almost none.

Task still needs to perform on the system:
- Clean up the rest of the spyware and virus
- Set up automatically Microsoft System Update
- Set up automatically virus update
- Perform a scan disk to check hard disk integrity
- Install the Creative Lab webcam
- Install CD Burning software
- Backup personal data from the system
- Open the system, check the DIMM type, buy and install a 512Mb SIMM

Items I need to carry to conduct the repair next time.
- SA-530 disc (WinPE)
- CD Burner software (Nero Burner 6.x)

That's all.