If you had two partitions, and risky programs were installed on the second one then this WOULD hold the spyware and not your windows one.
Though if you installed the programs on the one with Windows which could have spyware, this couldn't spread to the other remaining partitions with important data, though viruses still could as these copy themselves...
A good way to split it would be to have all software on the one with windows, and some that you know are safe on the second one with all your important files. Games would be safe on the second one too.
An important thing to remember is that spyware does not intertwine into other games that didn't hold it in the first place, they don't copy themselves in that way.
Do you have spyware cleaners? and any other protection to help get rid of things? If not you will need them! I'll post some good ones in that case
Three main types of protection are needed when using the web
Virus/trogan (different thing) cleaners
AVG Antivirus (if it finds anything it tells you how to get rid of them):
Spyware cleaner. Spybot search and destroy, is a very good program:
Firewall (the default windows one won't count)
A good free one is Zonealarm and will protect you from hackers:
EDIT: As for formatting is concerned, this doesn't exactly delete data, it just deletes the information on the harddrive telling the hard drive where files are, the file table in other words.
Though this would cause spyware/viruses/trogans never to come back since it would have lost where they all are and so you'd be safe