I didn't think much about that then other than this must be a way for Microsoft to control piracy.
Not quite related. - it is not a form of piracy control, you perhaps simply did not pay enough for an OS/restore cd to be included. However, this is rather strange as every [new] PC that comes with an operating system should also come with a serial number.
You may wish to inspect the computer case for a serial number. With this serial number, you can simply obtain any Windows ME disk and enter the serial number to install the contents.
Have you reformatted the HDD or did you simply remove too many files?
Try the following:
1. Before Windows ME loads, press F8
2. Select safe mode
Can you still access safe mode?