if the pc is infected and the user goes through much removal of different files, wouldn't this effect the computer? You might delete some key registry files or important windows files?
Usually you should not remove important windows files or registry key's. There is simply no point in this.
Therefore it is recommended you use standard scanning tools or ask help in places like this where people are trained to deal with malware, otherwise you might inadvertently delete something that should not be deleted.
If a user decides to repair windows xp using the recovery console, will it leave all the programs and documents in place? I cant imagine going through installing all the lost softwares on the pc again.
The recovery console is a command line interface that repairs nothing automatically. You can enter commands in order to copy files, delete files, stop services, start services, and so on. That way you can get a computer booting again, for example.
A repair installation is another thing. Generally speaking, you should ignore the "type R to repair windows using the Recovery Console" and continue with installation. Afterwards it will detect your Windows Installation and ask if you want to repair it.