You're allowed to reformat if it's under warranty... Why wouldn't you be? It's not like you're modifying the parts (which would probably break the warranty, but I've never worried about that either).
And what's the BSOD error code that you get? We can't tell anything from just a description of it. Tell us the STOP error code, which will be formatted as such: 0x000000XX, where XX = some alpha/numeric combination. There also should be a message at the top of the screen, in all caps (for example: IRQL_NOT_LESS_OR_EQUAL).
It also sounds as if he could have a virus infection. Please go through this guide:
and post your log files it generates here: