Computer virus called W32/Blaster.worm?

My dell desktop comp says it has a malicious virus. It's called the W32/Blaster.worm! Malware Protection shows up on screen saying to purchase this protection and it will clear it up. I can't log onto anything. It will not let me restore, add or remove programs or software. It's blocking my computer from me doing anything to try to resolve this issue. HELP! Can I install one of my dell cd Ito fix this issue? I'm afraid to purchase the Malware Protection because I'm unsure if it's the nice guy or part of the virus trying to get credit card info from me. What can I do besides taking it into a repair shop. I have the cd's to restore back to new but it won't allow me to remove any programs or allow me to do anything at this point. Please if you have any suggestions I'm willing to try anything. I tried some of the removal advices such as RUN (shutdown -a) it won't even allow it to open! F8 doesn't work! It won't allow ANYTHING to open up on my computer. HELP