That is usually what I do if something like this has happened to someone, this insures that there is nothing malicious left on the hdd. If you do this and you need some stuff off of it before you wipe it, I would use caution as you could transfer it back over to the harddrive after its been reformated.
What kind've firewall are you using? Are you behind a router?
I would download zonealarm (its free), disable the internet connection and install it. Then I would change all your passwords and see if the problem persists. Zonealarm is a good at chatching trojans and will prompt you when someone is trying to connect to your PC, it will show you the address it's coming from and you can then deny access.
If you need any help just lmk JD, I hope you get it sorted out. Its definetely a leary feeling when people have information like that!