It certainly can't do any harm to try and contact HP directly but they are such a big outfit that it may take some time to get an answer. My guess is that they will turn the problem over to Circuit City.
In the end I think you will have to abide by the terms of your warranty. If that means taking it back to Circuit City then so be it, but I suggest that if you don't feel the doofuses
will listen to you and make sure that the service engineer takes every possible step to safeguard your data then take along some muscle.
Late Breaking Thought
. Have you tried booting the machine up in "Safe" mode? This is done by pressing the F8 key (several times if necessary) just as Windows is about to start up. Windows then offers a menu which includes (from memory) the options to start in Safe Mode, Safe Mode with Networking as well as to start Windows normally. If you can get the machine up and running in Safe Mode (preferably with Networking) then you should be able to access your data and copy it elsewhere before returning it under warranty.
Using this Google search
I came up with numerous articles about starting and using Safe Mode which may be of use to you.