Best thing to do to test the phone line is just take the PC to another location/friends house and try the internet using their line.
If its fine there then you should get a line check from your phone provider.
I suggest getting your hands on a little program called 'Ad-aware'. Basically get it updated via the update option in the software and run a full scan on your pc.
Its just like an anti-virus program except it detects and automatically removes all the files that may be causing those annoying pop...
Set the bios to boot from cd first, put the Windows XP cd in and restart the pc.
During the installation you'll have the option to format the hard drive using NTFS. Select that one (not quick format) and thats all.
Just make sure you back up all your important files before doing so.
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