I was given an used HTC desire, doesn't boot, how can I reinstall it? I never tweaked an android phone.

I was told to turn it on by pushing both the power button and volume down button.

I'm not sure if it has been rooted, I can read "clockworkmod" when I go into recovery.

Here is the whole phone and the text displayed. The third image is what I get when I go into the "recovery" menu.

  
Screenshots (click images for larger variants)

I'm just looking to make the phone usable again, what are my options ? If it involves reinstalling android, there is a 128MB micro sd in it, what should I copy onto it, or using some particular application ? I also have a micro usb cable.
clockworkmod is a custom recovery, so the device is probably rooted.

A 128 MB SDCard is as good as no SDCard at all, and probably cannot even hold a single image to flash. You might want to check for a bigger one, everything below 4 GB makes not much sense (make sure to buy nothing below class-4, class-6 is better, class-10 not really necessary). After that, check on CyanogenMod.COM for your device, and follow instructions there.

Before doing so, however: Have you tried to boot the device normally (just using the Power button)? It might even boot up normally. If not, you can execute the wipe data/factory reset item in the last screenshot, followed by reboot system now and see if that helps. If not, see above :)