Thanks for all the responses above.
and now that the cluster is back to shape and i would like to report back what was done.
1. Yes, the failed node was evicted from the cluster and did a Clean OS install on the new hardware
2. the Windows Cluster was reestablished and handed us ( our host service provider handles our OS and below)
--one thing I would like to add here though, make sure your Surviving node( the one having the SQL running) will NOT fail over to the new built NODE.
3. once I got the Windows cluster, i did run a Cluster validation report and it went well.
4. The I installed the SQL Server 2008 ( by choosing the adding new node),I had to run the installation by running from command line though. it went smoothly.
5. installed SP3
6. Installed other stuff (Oracle client for the linked server, and some other backup/monitoring utilities)
failover and fail back, things work as expected.
Yeah, we are being lucky, i think, this incident didn't create much drama. thanks for all the above inputs again.