Notebook flashing cursor issue

Hi there
We have a notebook problem here. All has been working fine until two nights ago when a strange pop up appeared asking for permission for a process to be run on the P.C. Clicked 'No' but then all sorts of scripts started to be run (inferring that files were being installed) and then a pop up appeared suggesting that the P.C had been virus infected and to clear it needed to buy some American software for 1 year, 3 years etc.
Turned off PC at this point and now when I boot up after Toshiba splash screen I just get a flashing white cursor in the top left hand corner. F8 (safe mode boot up) doesn't work. Only F2 and F12 options available. Checked boot option on F12 and HDD is highlighted first.
The PC is a Toshiba NB200 notebook, running XP with no CD and no other peripherals connected and is only 18 months old.
Macafee virus checker is installed and up to date.
Have looked at various forums and other things I have tried are:
Uncoupling and decoupling hard drive - no affect.
Pressing zero on boot up just returns ******* HDD RECOVERY MODE******* in bottom right (as well as flashing cursor in top left) - this just stays there with nothing else happening (i.e. no hard drive flashing etc etc).  Also same when zero and P pressed together.
Many, many thanks in advance
Solved!
Go to Solution.

Toshiba NB200-11L 
Have tried F8ing but no joy!!
Turn the computer on and immediately press and hold the F8 key. That should give you the Advanced Boot Options menu.
   Advanced troubleshooting for general startup problems in Windows XP
If you can get in with either Safe Mode or Safe Mode with Command Prompt, you can try a System Restore.
   How to restore Windows XP to a previous state
   How to start the System Restore tool by using the safe mode option with the Command prompt in Window...
-Jerry

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