Re: On Linux boot I get a init-2.05 prompt
init and telinit ought to be in /sbin - you have a strange system otherwise. To boot normally you need init.
It is possible to reinstall without losing data, often distributions have an upgrade option. If that option isn't there your backup strategy depends on the partitions and free space on your harddisk. A cd-writer would come in handy here - to be extra sure because specify a wrong partition and you could say goodbye to the data on it.
To reset the mbr is straight-forward, just that you need to know whether it is lilo or grub that loads Linux. Do you have a /boot/grub directory? Or the file /etc/lilo.conf? Then head to the documentation.
Starting over depends if any of the above helps your situation. Do a backup first then try for a repair would be safest. Good luck.