2. When a menu appears tell it to load with the options to start with CD-ROM support.
3. Then once the command prompt appears type in your CD-ROM drive letter and then setup.exe.
Example: E:\setup.exe

Replace E: with your actual CD-ROM drive letter, and do note in MS-DOS mode drive letters can be bumped around and change.

Edit: Before attempting to reinstall Windows you may want to try starting the system using the Startup Disk! That way you could backup any needed files first, etc.