Your post above (number 6) shows the directories one would expect to see in the / (root) of a Linux filesystem so that is good.
The setup command referred to earlier is used on Grub Legacy, a previous version of Grub. Ubuntu uses Grub2 so that command isn't used.

The first option on boot you refer to above would be the internal hard drive of the computer, WDC (Western Digital?), the second the CD/DVD drive and the third is obviously if you are trying to boot over a network.

The fdisk output you posted has seven columns, the first from the left is Device and below it shows 3 partitions. /dev/sda1 is the first partition where Ubuntu is installed, the second is an Extended partition which contains no data and the third is swap, similar to page file on windows.

No. Reboot the CD and select Try.

No. You will overwrite everything currently on it. If you want to just try to recover specific files you could do that if you know where they were. Usually they would be in the /home/user directory?? Replace 'user' with whatever the actual name of the user was. To do that enter this command in a terminal: sudo mkdir /mnt/sda1. sda1 is the partition on which all your data is so after running this command enter in a terminal: sudo mount -t ext4 /dev/sda1 /mnt/sda1. Copy/paste as it needs to be all lower case with correct spacing. You should then be able to navigate to the /home/user directory or to wherever you have your files in copy them to a CD/DVD/flash drive or whatever by opening a file manager, probably entering in a terminal: sudo nautilus. That should open the nautilus file manager.

It might be simpler to try to recover grub. After running the mount command above, you could navigate to the /boot/grub directory and look for a grub.cfg file (use the sudo nautilus command) and find the entry lines in that file beginning with menuentry and post them here.

To get more detailed information on your grub files, you could boot the Ubuntu CD and open firefox or whichever browser you have and go to the site below, read the instructions then download and run the bootinfoscript. Instructions are on the page, a link in the Description box. You could post that information here.

http://sourceforge.net/projects/bootinfoscript/

Get and use the bootinfo script.

Post the entire results.txt here.

This will give a lot of information on your drive and be of great assistance to fixing grub and also any recovery efforts that may be needed.