Since you've recovered your data, I'd suggest reformatting the drive and starting over just as today's excellent featured answer outlines.
That said, ME is difficult to keep stable especially as you have it and I personally got fed up enough to get a new XP system and plan to turn the old ME machine into a Linux server.
I also got fed up with MS Office messing up my PC and have switched to Open Office on XP and I'm quite happy with the results.
My WinME system (yeah, I know, I've got XP on the newer box and let's leave it at that) crashed recently and obviously the Windows files were messed up because even the Restore option didn't work. So I used a DOS disk to recover my documents and then reinstalled the OS. All works now but I wasn't given the option of saying where I wanted the OS to be, so the procedure created a Windows.000 folder alongside the old Windows folder. I presume I can delete the old folder but can I rename the new .000 folder just to Windows, or will that trash file associations? Is there any drawback to just leaving the new OS at home in the .000 folder?