Ok. That information helps.
I can't remember every screen on the Windows 7 installation so bear with me and my lack of details. Try the following:
1) I want to make sure your BIOS settings are correct. Go into your BIOS (I think I have the same model MB, and if I remember correctly the Delete key is what gets you there) and check your storage/SATA settings. It has been a while since I looked at my BIOS settings so I don't remember where they are exactly. I'm also unable to check right now, but I will this evening and let you know what I find. If you can find the setting then make sure it is set to IDE mode, not RAID. I don't think this is a problem right now for you as you are able to see the drive correctly, but it is always good to be sure.
2) Exit BIOS and boot to the Install disk. I think the first screen is the language settings screen. Click next.
3) I believe the next screen gives you the option to "Install Now" or Repair. Select Install Now.
4) Next screen might be the product key screen followed by the License Agreement. Pretty self-explanatory.
5) After that I think is the "Upgrade" or Custom Install Windows Only" screen. Select Custom: Install Windows Only. (NOTE: as it says on the screen, this will wipe out all your files and settings.)
6) Now you should have a view of your drives/partitions. Since you only have one Drive then you will likely see Drive 0 Partition 1 and possibly Drive 0 Partition 2 as well. Your options should be Refresh, Load Driver, Drive options (advanced), and the Next button. This is the screen I am really wanting you to get to. Click Drive Options (advanced). You should see your options change to Delete, Format, New, and Extend. New and Extend will probably be greyed out. Select one of the partitions and click Delete. Click OK through any warnings then do the same for the other partition(s). You should end up with just a single entry on the list that reads something like "Drive 0 Unallocated space". That should be selected by default, and you should just be able to click "Next" at this point. You should see a couple messages pop up. Windows will automatically set aside the minimum amount of space it needs for a "System Reserved" partition and format the remainder of the drive for installing Windows. This will give you the largest C: drive you can have.
Give that a try and let me know what happens. If it locks up at 30% without any error messages then try leaving it overnight to be 100% sure that it isn't budging anymore. This will also give it plenty of time to display an error message (if it is going to). If it gives you an error at any point during the process then record the error and post it here. That should help me (and anyone else who ends up popping in here to help out) identify what might be the cause of your problem.