If you use Yahoo for your mailbox then you should be fine. Just change passwords as a precaution.
Nimda has 5 main methods of spreading, four of which are still viable today: Via infected email attachments (usually named README.exe), via compromised websites, launching an .exe file infected with the worm, and from network shares infected with the worm. The last one is an exploit of a really old vulnerability in an obsolete web component.
If you are interested, you can read up on F-Secure's writeup here
The recovery partition should be ok to use. Just remember to get your important data off before doing a factory reset.
All modern antivirus software should be able to stop an infection like this. Did you have one prior to this?