Welcome To Techimo
Could be a networm...

j/k
I think it was a virus and the missing file you somehow lost, the *.dll thingy, you might want to repair that one out or reinstall ur ME. I dont know much about using ME though, since ive ever experience using Win98 and XP only. So my suggestions could be a little bit different compare to urs.
Reinstalling ur OS (operating system) won't loose any data inside ur C: or harddisk. Unless if u decide to format ur C:, which is good but this would be ur last option i recomended. I'm also afraid that ur pc may have infected by a virus. Know that you really have to update ur virus definition too.
To check whether ur hard disk is out, have it checked for errors or scanned. But if u can still access into ur desktop, then I think ur hardisk would've been okay. Should also defrag, at least once in a month

I never trust downloading games on the internet. Spyware stuff you know..