Yes, a clean install will format and delete everything on the hard drive before reinstalling only Vista. You would want to backup anything that you do not want to lose first.
I'm happy to hear that you got it running again. The only way to get the default settings for the entire registry is from a clean install.
You can use System Restore points to return to certain dates of the registry, or create a manual full backup of the registry (current) to restore with though.
You may need to use a 3rd party partition program to acheive this easily. If you can post another screenshot of Disk Management without anything cut out, it may better help see what you may be able to do though.