(2-part post):
You need a Startup disk. If you haven't got one, put a floppy in the drive and do this:
Start > Settings > Control Panel > Add/Remove Programs > Startup Disk > Create Disk.
You now need to boot the PC from the Startup disk. Your PC will probably look for a boot floppy before booting from the hard drive. (If it doesn't, post again and I'll try to guide you through changing the BIOS so that it does). With you boot floppy in the drive, restart your PC. Assuming that the BIOS is set in the usual configuration, you'll see a DOS boot-up screen, instead of Windows. Select the option for 'minimal boot'. When you see a flashing cursor, type 'C: format' (without the quote marks) and press 'Enter' You'll be asked to confirm that you want to format the drive. Select 'Yes'.
Once the drive has formatted, restart your PC again, still with the Startup floppy in the drive. This time select 'boot with CD support'. Watch your screen and it will tell you which letter has been allocated to your CD drive. It will almost certainly be E (and not D as you're probably used to seeing).