If you faintly remember the name of malware that hit your computer then please mention it, as BC HJT experts can give you a better answer. Some malware (actually rootkits) can reside in places hidden from a standard hard disk format operation. But those are very rare ones. In general, a full format during Windows XP setup is sufficient.
I would attempt to answer your questions :
1. Not bad idea.
2. Run Aefdisk after CopyWipe. Actually, Windows XP can create partitions by itself when it sees hard disk has no partitions.
3. CopyWipe reads raw sectors of hard disk. NTFS or FAT or whatever it does not matter.
4. Windows XP will ask you to create new partition durng setup. Its an easy process too. (But you were using Aefdisk ?)
You can have a look at other hard disk wipe tools :
KillDisk ( http://www.killdisk.com/
Darik's Boot and Nuke ( http://www.dban.org/
Also a useful walkthrough of Windows XP Pro setup :http://www.theeldergeek.com/xp_pro_install_-_graphic.htm