Strange computer behavior please help

Hi, I'm trying to help my sister who has a new Dell Inspiron 2200 with some strange behavior. I should first say that she's had McAfee Firewall Anti-Virus installed since day 1, kept updated, and never opens potentially unsafe attachments. Ok, so after a month or so with the new computer it began behaving strangely. First, pressing the "l" key changes the program to full screen and back. The "9" key acts as "End" and vice versa. Randomly (it seems), type begins to automatically insert despite "Ins" having been pressed. Other examples:

"t" would come out as "t4" "y" would come out as "7" and vice versa "1" would always be preceded by a Tab "3" would cause search bar to come up

These problems weren't static, and would come and go, and get better and worse at different times. Updated anti-virus scan as well as Spyboy scan revealed nothing. I eventually advised her to format her hard drive, which she did, but the problem resurfaced from the outset. I then had her disable the HD from the BIOS and boot directly to her Dell Windows XP CD-ROM, and even from there the problems surfaced.

This sounds like virus behavior to me but I can't understand how it can survive after a fresh format. I also don't understand why it appears when booting directly to a CD-ROM. Naturally, I advised my sister to buy the shortest possible warranty, so Dell no longer wants to (or is obligated to) help.

Any ideas-advise would be greatly appreciated. TIA. -- Charles C. Shyu