Overwritten MBR - Can't access Windows [HELP]

I own an AOA-150 Windows XP and I screwed up.

I tried to dual boot with windows 7 but got tired of it and since it was nearing 30-day expiration, I removed it. Here are the steps I did which was I believe is very very wrong:

1.) created a partition drive 16000Mb Labeled D: and Windows7 as it's name.
2.) installed windows 7 on the partition that created.
3.) removed windows 7 by FORMATTING THE HARDDRIVE. (facepalm)
4.) Merged the D: with C: Local Disk
5.) Since the Windows 7 still shows on the Boot selection menu. I searched to get rid of it and found EasyBCD.
6.) Restarted. RIP for a week now AOA150.

Well, I searched which seems to be the whole forum of yours and found out that Acer uses a Custom MBR for Fn + F10 Recovery to work. But since I installed Windows 7 it replaced the MBR and now Fn + F10 wont work.

After all this, Everytime I open the netbook. It shows the Acer logo then an error that shows that I should place the windows CD in and click repair or something. It shows me 2 options Enter=Continue ESC=Cancel.

I don't have an External CD drive. I don't have a Windows 7 Copy Either. I've just downloaded it for a trial. Also, I don't want to install it once again. I have an External HDD 80Gb.

I have done some search for a week now. And I've found out that: Acer and it's custom MBR can be restored If you can Access XP and PQSERVICE.

Reformat will be the last option. But considering it with the situation I'm in.

http://aceraspireoneao751h.blogsome.com ... -recovery/ <<<<< Look at the Last solution. I can't understand it well since its translated with a software.

I know that the PQSERVICE is still there so I want to retain it as much as possible.

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Ideas :!: Its just Ideas. I don't actually know the ways or if it is safe.
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Install a Linux Distro on External HDD and access PQSERVICE then replace MBR. (I read something about Wine being able to emulate windows)

Install a Linux Distro on the External HDD and Booting from it and back-up all my files to my WD 250Gb then reformat.

Use the External HDD as a bootable drive and install a Windows XP copy from it. Then install all the necessary drivers. [will it retain the PQSERVICE Drive?]