So you deleted your hidden recovery partition? Then you cannot use the recovery option in the BIOS anymore. "C:" is not a physical drive, it is the name ("drive letter") of a file system of a partition on a drive. A proper operating system installer should first give you the option on which physical drive to install. Then you may even create a partition of your preferred size. This will get formatted and named "C" as default. Then the installation starts. I don't know what's on your USB key, but maybe you need to prepare it newly from a proper CD image. You may also connect a disc drive via USB and install from a disc directly.

Your description is incomplete. There is probably an error message reporting the problem. Maybe it is telling you that there was no bootable device found. Did it work before? Does the BIOS detect a hard disk? Did someone format the hard disk? If the hard disk is working, you can always reinstall any OS using a bootable USB device. You may also try to reinstall from the original recovery partition via BIOS option if it wasn't deleted from the hard disk.

You probably want to format the hard disk partitions. You can't do it while your system is runnning from your hard disk system partition. If you didn't change the partitioning there should be a hidden recovery partition. On my Eee PC was a small Windows 7 Starter recovery partition of about 4GB and there was an option to reinstall from it in the BIOS. This probably doesn't overwrite your user partitions fully. A quick formatting is unsafe and personal data could be restored. The safest way is to boot a live OS from an external device via USB and format from there. You can either connect an USB CD/DVD/BD drive (SATA drive via an USB-SATA adapter) or use a prepared, bootable flash drive. Preparing the flash drive: The flash drive will loose all it's previous data! Download a Linux live CD image (".iso"), like http://www.knopper.net/knoppix/index-en.html, or make one from an existing CD/DVD. Now you need a tool (search the web) that writes a bootable .iso file to a flash drive, so the flash drive becomes...