I think reformatting is a little over kill at this point. What I would do is vreate a restore point, do a full back up of important files on the PC and put that on a CD Rom or a DVD. Hopefully you have XP Pro, if not then your gonna have to drag & drop what you want to backup.
Do a backup of your data, cuse if things go south (and they can) you wont loose anything.
Your gonna have to do what has been stated ubove in that your gonna have to clean your registry. I wouldnt recommend you do it with reg edit, I would see if there are any programs on the web that you can download. In fact look for a program called Uninstall Dummy, I think you can download it and try it on a limited basis, it worked once for me.
If your looking for cheap versions, see if you can download a registry mechanic or registry doctor and see if there is a crack for it on the net (
http://www.astalavista.com/)...up to you.
I would try and use Uninstall Dummy first, if that fails then I would go with a registry cleaner, and remove everthing associated with SHIII. After that reboot, and if your box still works create another restore point, then try the resinstall.
Back up first though!!