To restore your device you can use the Nokia Software Updater. Reinstalling with NSU keeps your pictures, music and docs but you'll lose all the installed apps and you'll have to re-enter passwords for accounts.

If you really need to keep all your data (installed apps included) you can follow instructions from here: http://wiki.meego.com/N950/Fixing_MALF_state but you'll see a warning about voiding the warranty.

If you decide to go this way, you need to remove the Air UI plugin file: /usr/lib/qt4/plugins/inputmethods/libairuiplugin.so (this is the location on the phone). So if you have followed the exact same steps with the exact same names as in the wiki above, you need to run this command (after mounting the rootfs):

$ sudo rm /mnt/n9/usr/lib/qt4/plugins/inputmethods/libairuiplugin.so

Also remember to remove the malf file.
After boot up you should remove the Air UI package from the Application Manager.