Is their a point where a viral infection can be so bad that not even Hijackthis can fix it?

Sometimes removing all of the bad stuff will spill over and take good stuff with it as well. You would then have to reformat and re-install

Ouch,

Well I'm a fan of clean installs so lets just hope they don't figure a way to stop a clean install.

HJT scans certain areas of the registry that the maker (Merjin and now TrendMicro) think will be used to hijack systems.
So, HJT can't "fix" an infection - it can just remove the references in the registry to it. If the bad guys think up a new way to hide their stuff from HJT, then you won't see it if it's not included in the areas that HJT scans.