1) Cyprus not the Virus: my computer was never corrupt, and the DVDs contain a non-corrupt full image. The problem was with the AI RECOVERY software, for whatever reason it only handles 500GB hard-drives or less, my ASUS came with a 640GB and therefore it was not compatable with it's very own recovery software; a miss-step by ASUS no doubt. The only option I could find online, similar to your option 2, was to buy an internal 2.5 SATA HDD and use the recovery DVDs to recovery my OS onto that, then update the recovery software from version 1.0.23 or less to 1.0.24 or more. Then replace my original 640GB HDD and recover my system back as it was in the beginning.
2) dc3: given my symptoms, there was no active OS running on my system and therefore F9 was moot. I had used F9 recovery partition in the past, great results everytime, but this time I wanted to try the DVDs, which failed for the reason above. Since the program stalled before it initiated any setup for whatever reason F9 would only bring me to a boot menu which did not include the recovery partition, it was almost the same as pressing esc upon startup.
3) Fix: ASUS representative got back to me last night and after mentioning the F9 option, which I explained did not work, she gave me this link: http://techdows.com/2011/07/download-windows-7-integrated-with-sp1-iso-official-direct-download-links.html which is a place to download the appropriate Windows 7 ISO. After doing this, and doing the install, I had use of my computer again. Then I pressed F9 and was able to get into the recovery partition and reinstall again, which gives me all my ASUS mumbo-jumbo.
Ended up spending no money, thank goodness, almost sent this thing into ASUS for $100-plus for repair. Hope this helps anybody with a similar problem and/or helps the excellent bleeping computer residents to help people with this problem.
Edited by HijackThat, 19 July 2013 - 04:06 PM.