help!!!

[petalop]

A few days ago my computer stopped dialling up an internet connection saying the modem was busy. I turned it off and used my other computer. Then when I turned it on again the screen resolution is sat really low, and I cannot change it. It also tells me that it detects new hardware, but then cannot successfully install it (I have no new hardware). Now it tells me I have no drivers for my video and no modem at all. i have tried system restore, but no matter haow far back I go, nothing changes. I have been told I need to format the harddrive and reinstall xp. Is this true???