If you install Windows as a repair or Fresh Copy without reformatting, all your files will still be there. If you reformat, you've lost it all. Most likely it sounds like you've picked up a virus that killed your computer. Messing around in the temp folders, especially the IE temp folder, shouldn't do any system damage.

The way you described the breakdown is a lot like how a trojan works. It starts with one file and moves on to the others, deleteing or destroying them as it goes. If that's the case, then it should have only destroyed your system files. Reinstalling windows as a repair/fresh copy should restore the system without removing any of your important files.

Hope that helps.