This is really weird, I can install and run Linux but when I try XP, Vista or any installation of Windows it hangs when doing setup. Prior to this all the hardware I had in this machine worked fine so there is nothing new. I have the MSI 965 motherboard and 2 sticks of ram. Running memtest I did get one stick to fail but the other came back fine, even after removing the bad one it still does the same thing. I have also tried 2 hard drives so that should not be the issue and according to Intel it's not the processor. This leaves the Video Card, RAM(Even though memtest came back good) or the motherboard. I just don't know what it is that I have to replace
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Are you getting windows blue screens? If so, try changing memory timings to a higher numerical setting, or bump up the memory voltage by .1 volts. Delete all old partitions and start over.
It would be more helpful if you said which part of the setup does it hang at, or is it just random? Sounds alot like the F-lock situation