Windows 95 Installation Error SU99404

I am receiving the above error message while re-installing Windows 95, and the information it gives me is the following:  UpdateCfgSys= Or UpdateAutoBat=processing error [0x194].  This happens at the point where setup is copying files.  It just starts that proedure when the error pops up.  I am trying to help my daughter who some how got the idea she knew something about computers, actually she doesn't know a byte from a bite, but she decided to compress her 1GB hard drive following directions from a book.  After that she claims that on boot up a message appeared saying that command.com isfhelp.sys and himem.sys were missing or corrupted.  We picked up the computer and I decided to go ahead and reinstall.  Seemed simple enough.  The Autoexec.bat and config.sys files are scary.  Stuff in there that I have never seen before.  I would have liked to format and start all over but can't format a compressed disk.  Tried using Fdisk to delete the Dos partition and then replace, but it says there are no partitions to delete.  So all this is beyond me and I could sure use some help.  I will increase the points accordingly if this is a real doozy.