Hello,
You can safely ignore the encrypted files and the certificate in that case. In terms of formatting, once you have backed up your data, just boot into your Windows DVD, or however you are going to install Windows. Then on the screen where you choose what hard disk drive/partition to install onto, in that screen are the tools for reformatting. Using this method will make sure all settings are exactly as Windows wants, so I would recommend this over any programs (unless you have very private data that needs wiping 24 times) and it is much simpler.
In terms of using the D:\ drive, it will not cause problems when you get used to it, it is just people not knowing what they are committing to.
In terms of Office, do you have any DVDs, or product keys for your old copy. Just on the off chance, are you a student, as students can get discounts up to 96% on Microsoft Office, bringing it down to just the cost of the DVD? Otherwise, there is something called Open Office, which is Open Souce Software. It will look slightly different to Office, but you will soon get used to it, and it is completely free, with all features of Office. If you have any questions, do not be afraid to ask:
OpenOffice.org - The Free and Open Productivity Suite
In terms of DVDs, here is all the different versions so you understand in general:
You get a normal CD and DVD. DVDs are bigger than CDs. A typical CD stores 700mb of data, a DVD 4.7GB (4700MB) All figures are approximations.
Both CD and DVD have:
R: Read. You can put data on once, and then you can only read from it, you cannot ever erase it. If you format it, the CD/DVD will look empty, but will have full capacity - what data was on it. This means a 700mb CD with 100mb of data on it would be formatted to am empty 600mb disk.
RW: Read/Write. More modern, and now not really any difference in price. Can read and write more than once, can delete data, can format to full capacity, just like a USB memory stick.
CD and DVD also have duel layer to double capacity. You do not want or need these.
There is now BlueRay on the scene. Expensive and huge capacity, needs special reader. You do nopt want one of these, you will not be able to use it.
Do not go for any other strange DVD, such as the old DVD-RAM, it is NOT what you want.
Ignore + and -, there is effectively no difference now.
Suitable DVDs: DVD-R, DVD+R, DVD-R/W, DVD+R/W
N.B: Sometimes RW is without forward slash. CDs will be too small to hold an Operating System.
In terms of making a DVD/Hard Disk Partition, I will go through this after you are back on your feet after the reformat. Making a partition will be very slightly harder, though still very possible, and sometimes a computer manufacterer will provide a tool to make a DVD/Partition. Which manufacterer makes your computer?
Thanks!
Richard
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(or SATA II or SATA III now, or if you want to go old school PATA or IDE 
). If you don't know what any of that means now you'll soon learn while building your PC.
One does end up with more than the occasional problem, and it is annoying having to keep changing the install directory. If you have not already done it, I can answer anymore questions you have, and if you have any encryptd files, you NEED to backup the certificates first. 
i now know enough to know that's not how you do things lol.