-See if you have any rare/exotice hardware that Windows cannot recognise and needs drivers for (storage devices)
-Unplug all USB/Firewire/Expansion cards until windows install has finished
-Update the system BIOS (if available)
-Update the optical drive firmware (if available)
What "disk" are you installing off? Is it a retail CD, a burnt copy, or a pirated version that may be corrupt? Is the CD scratched or rotting?
If its a copied/pirated/burnt disk, try borrowing a retail pressed disk from a friend and see if that works.
Also, in case you are using a "customised" / "nlited" / "hfslip+" / "SP2/3 slipstreamed" disk, try using the XP RTM version, to check if the reason setup hangs is because of a corrupt or missing file.