Yes, it's possible. Formatting does not destroy anything, it just wipes the "table of contents". If nothing overwrites the virus' code during the reinstall, some viruses may sneak up from a formatted disk. I've also heard about viruses that are able to reinfect a cleaned machine from the System Restore points. Low level formatting (zero filling) is the safe way in case of a real nasty virus, multiple random writes would be overkill.
To be more precise, viruses can infect the boot sector which does not get overwritten by a regular format. So the drive has to be wiped completely to be safe. And even that is not yet a guarantee of anything.
If you left your bios unprotected (some can't even be protected) the virus may have infected it too, in which case you're in a pretty bad shape.
