I do have one little hint that might help before you try formatting, and if your going to anyway, if this doesn't work, you haven't lost anything.
First, I want you to enter safe mode to see if the devices work then. If they do, it suggests a driver issue.
Restart the PC and press F8 at bootup a few times. Select safe mode from the list that appears.
After this has loaded up after a while, do all devices work as they are meant to?
If it does, its a conflict of some kind.
Now enter the normal windows mode, and go to the Control Panel, and go to System, and then to the Hardware tab, followed by clicking on the button saying "Device Manager".
You'll find a long list of all devices installed. For example, the keyboard, and Mouse. You'll also find one for the monitor here.
Now, open up the keyboard one first by double clicking it, and then again on the name of the device. A window should now appear.
Go to the Driver tab and select Uninstall, and after its done that, restart the machine. It'll find the keyboard automatically hopefully and re-install it there and then using default drivers.
Next do the same to the mouse using the same process.
Any help brought from doing this?
Next, we'll try re-instaling the monitor driver using the same way. When you open the option for the Monitor, instead of "Default monitor", does it say "?" ?= the name of the monitor?
I'm wondering though if doing the un-install feature will make the monitor go blank, which will be a bit freaky. But it should say to restart for the option to take effect, and if this happens, after a restart, the monitor should come back into use.
After trying these, a re-install of windows is all I can think of.
I hope this helps.