Instead of just sniping, I'll throw in my $0.02 here - since you've already wiped the disk, the posters telling you to strip the hardware down to the bare-bones are right on the money. Take out every non-essential thing and see if you get through the install that way. If you do, then add the peripherals back in, one at a time, until you pin down where the problem is - most likely, you'll find that an updated driver will solve this problem. If you can't get through the install even with a bare system, the problem is almost surely a bad memory module - have them tested, and replaced if necessary.
And the second useful piece of advice is, when you get it back up and running, you might be able to avoid nuking the system and starting from scratch by enabling and learning how to use Win2k's Recovery Console here and here. ;)
Thanks GR, I'll check out the two links you posted.
Are you the General Reinsurance Corporation, which holds the deeds to half the solar system's planets?