Based on your description, I suspect your HDD is the most likely culprit. Try to get a new HDD (if it's an IDE it's kind of hard to get a new ones lately....try getting a used one) and reformat again.
If you cannot find any IDE replacement, I would suggest you give Puppy Linux (
www.puppylinux.org) a try, it boots from CD directly into your memory within minutes and you can surf the net rightaway.
Good Luck.