Cannot reload Win XP

This is about my daughters notebook which is an ASUS Eee PC1001PX running Win XP SP3..
It has stopped working and will not run windows, it drops back to the Hardware fault screen, where you have choice to run Safe mode etc,,
From here it will not boot any of the Safe mode options it tries and eventually drops back to this page.
It will not boot from a previously good version of windows ... same as above
nor will it run windows normally....

OK.. this notebook has a recovery partition accessed by pressing F9. this has no effect so assume the recovery partition is somehow corrupted.
I have connected a usb cd/dvd drive with a windows install cd .
Have changed the boot options in the BIOS so that it boots to DVD.
DVD boots and starts loading all the processes. it gets to the running Windows screen, and finds the harddisk and starts the check ... at this point windows installer seems to freeze and doesn't complete, only way out is to power off by holding down power key...

any advice on how to resolve this would be grateful, am fairly knowledgeable but this has me beaten at moment?

Regards and thanks in anticipation.

Paul (stone1048)