Is this a white box system (custom built) or is this a Dell or other major OEM? Some OEM systems have built-in diagnostics. You could try memtest86 to check ram. Your HDD manufacturer also has out of windows diagnostics software that it wouldn't hurt to run.
The box is off the shelf Asus. The bsod happens during the installation of the operating system whether XP or Win 7 and just before the installation is complete. Before the re-installation the computor would go into a cycle of trying to boot into windows 7.
I'm guessing it's not a new computer. If it is, contact Asus for warranty support. There are applications like Geek Squad's MRI, or Hiren's Boot Cd that allow you to run hardware diagnostics on your computer outside of Windows.
Yes the computor is about 4 years old. Definitely hardware, I will just have to find the problem by process of elimination, try different power supply, ram, and harddrive. could it be the motherboard? thanks for your help Mjmacka.