1) The Bios update is for he SSD, not so much for installing windows.
2) Updating Bios is best done using a Bootable CD, not from within windows.
3) Custom Install should NOT depend on having a pre-existing windows installation.
NORMALLY custom install is REQUIRED if you need to install a Driver for windows to complete instalation (The old "F6") or to delete partitions, or partition the drive so that windows does not take the whole drive and make one large partition. For SSDs normally the whole drive is used as one Partition (Note windows will create two partitions on and SSD - 1 a small 100 mb system partition and then a 2nd one for the OS.
1) You DO NOT want to install using BIOS set to legacy Mode. For SSD should be set to ahci.
.. Defective SSD. Download OCZs Tool box, a Bootable linux ISO
.. less likely But Have you verified NO memory errors (Download and run memtest 86 - Bootable ISO)
.. Yes, possible defective DVD drive, But if it was not giving problems prior to installing Win 7 on a SSD - doughtful.
Should be able to Re-install HDD and verify memory and DVD drive. With HDD and in windows I would download and run Prime 95 to verify system stability.
DELETE all existing partitions and run OCZ tool box, do a secure erease after deleting Partitions. This should indicate if you have a defective SSD.
Day late and a dollar short - Curcial M4 would probably have been a better choice.
Performance wise, probably not much diff in day-to-day real world usage. Power wise M4 lower, User problems generally lower. For desktop, anandtech still recommends the Samsung 830 and M4 for Laptops.
Not a lover of OCZ as a company. http://www.anandtech.com/show/5719/ocz-vertex-4-review-...