Trojan.Downloader.Agent.8 has taken over my laptop!

[pgolly]

I have picked up this virus on my laptop and when I switch it on I can't open anything. The eggtimer just comes up and won't allow me to do anything. I can't even get into my AVG virus checker. I have tried running in safe mode but the only program available is Explorer and it is 'not responding'.
I am using windows 98. Can anybody help please...

[SSE4]

If the system is completely locked and you are unable to access current/download new software then it is likely you will have to format.

[pgolly]

I'm not an expert on computers so wouldn't know how to go into DOS. Also not sure what you mean by nuke and pave?

If I was to format it, I take it I would lose everything, plus I haven't got any software to put back on it!