Sorry It took me a while to post again trying to try all of these.
1st of all yes I have performed the Dell System Test and everything is ok with the system.
The error i receive when the instalation fails is "windows setup could not configure windows in this hardware"
Now what I have noticed by pressing shift + F10 is that it fails while performing Windows Desktop Update, exactly after it changes the screen resolution to my systems native resolution, at that moment I recieve the error message.
I tried installing windows in another machine and then switching it to the laptop, and it runs the set up till about 66% and then i recive the same error when the screen resolution changes and the computer shuts off.
I know its not the system bc i was able to run Ubuntu 10.10 fne fr an entire day, only problem is that I work with Adobe CS, and UDK and those do not run on Ubuntu, so Im out of ideas.