Problems with Safe Mode

I think I messed up....I'm a bit of a novice here, so I'm almost sure I screwed something up

Have a couple of malware things that NAV and Adaware picked up. I used msconfig to go to safe mode, rebooted and the machine (IBM T23) just hung. Located the XP Setup disk and booted off that, then went to repair mode and was able to get to my C drive, but essentially in DOS mode; no help. Re-booted again, hit f8 (should have done this first, I know) and was able to try to manually get to safe mode. Error message on c:\windows\system32\config\system was corrupt. I copied the system.sav file to system (yes, I saved the system file first) then when I rebooted, it looked like it was going into safe mode finally, but now I think it is in the middle of a XP setup. I get an error message that says "Windows XP Setup cannot run under Safemode. Setup will restart now."

I think I may have solved the safe mode problem, but now I have to continue with the XP setup right? Is there a way to back out of the setup now or is it too late?

Thanks