Should I Repair Windows XP or Reinstall It After A rundll32.exe Error?

I was infected by rogue spyware, thankfully I managed to get it off by un-registering the dddesot.dll file. But because I did it manually, I did critical damage to my system. Note: next time I’ll just buy Spy Doctor.

I’m required to open programs from Program Files whenever I execute an application. I cannot uninstall any programs nor install programs either. It’s become a real problem, and I plan to fix it immediately.

I just don’t know whether I should repair my OS(WinXP Home Edition) or just reinstall the whole thing. If I should repair it, how should I do that and will it format my drive?

Note: I have arranged to backup my data.
Sorry I should know better. It’s a Compaq Presario V5207NR Laptop.

My system restore is not functioning. Nothing in Control Panel Either (cmd works though).

My Start Menu is still available, I don’t think there is any damage to the GUI.

Reinstall your OS. That will remove all traces of the spyware as well.