will viruses ruin your PC or just mess up all your files so you have to start over?

it just depends on the virus. some will screw up your whole OS, while some may ruin media files (like pictures, soundfiles, etc). Still others may just replicate themselves and send themselves to people on your mail list, but not do anything for a long time...

Why? do you think you have one?

There are a few that can ruin hardware too. Most just copy themselves over important files corrupting your files and OS. Most have the ability to spread to other computers through email, internet, etc.

Some Viruses will overwrite the boot prom of the computer rendering it useless without sending the chip-set back to the manufacturer for re-coding.  Most of the viruses today are e-mail worms that use an individual system to self replicate and "attack" other systems.  There are a few really nasty ones that will effectively kill your operating system and write code to the boot block of the disk that will not allow repair.  There are a number of utilities to restore from this type of virus.

http://securityresponse.symantec.com/