Hi there all! My friend got this virus thingy on her laptop.

First i thought it was a wallpaper because she's an indian and there was chinese wordings displayed on the screen. Then i din bother about that and plugged in my USB flashdrive into the USB port on the laptop to do some file copying. After that, I brought my USB flashdrive back home and plugged it into my PC. After pasting the files into my computer, it seemed nothing. But after i restarted my PC, it started to show its 'TRUE COLORS". I got the same "wallpaper" on my friend's laptop! Then i googled along and found out that this virus is not new and it cannot be removed even if formatted the drive. Is this true? Has any1 encounter the same thing b4? I don't want to reformat my windows again because it's the 3rd time i've formatted my PC this month. Because of the stupid NEW USB flashdisks.