Hey don! Thanks for your question! If you start with the first recovery CD from gateway and reboot, is there an option other than "Repair Computer" usually, you will have the option (although I know it depends on the CD's) to "Restore to Factory Defaults" or "Format"...either of these will help...
Since you have tried to get into safe mode and it fails, then there is not much more you can do. One more thing I would try is hitting the F8 key and going into "Last known good configuration"...this will roll the system back before the software load. if that doesn't work, we will have to reformat and restore!
Yeah, if the last known good doesnt work, that leaves a reformat/restore. However, the gateway CD's should allow the option to do so. What model Gateway? You mentioned it came with a disk and the CD's...do you have to insert the CD and the diskette to boot to the CD?
Did they send you an Operating Disk CD by itself?