If you have a voltmeter the first thing you might want to do is check the CMOS battery, it should be just over 3 volts, it can cause a lot of BIOS problems and it's only about three bucks for a new one. Just go from the top of the battery to any ground point on the machine. If it's good, go into Setup, usually by pressing the del, F1 or F2 key during the memory test, and explore the settings, of course incluce any mouse or keyboard settings.
It sounds like you may need to reformat and reinstall windows, you will need to find the ProductKey to do that. Acers usually kept the full installation files in windows/options/cabs, and you can reinstall using them, if they're there I suggest copying them to the C: drive. Does the machine have more than one hard drive?