macbook white shows blue screen and won't properly shut down

Hi, I really need helps to resolve this matter.
Since last monday my macbook suddenly unable to properly shut down. After I clicked the shut down button, blue screen with the little spinning circle thing appear and I ended up using the on/off button to switched it off. I'm not sure why this problem happened.
When I asked a friend, he told me to reinstall the system using the snow leopard dvd that came with my computer. The problem is I'm not sure how to do it. Do I have to erase and install or just overwrite on to top of the old one?. And I wonder if there's another way to overcome the problem other than the one suggested by my friend?.
Please,please,please.. the blue screen really annoys me.