You can make the install partition any size you want, but 30gb seems a bit small. You'd definitely need to store your User files on another partition: User Folders - Change Default Location
You can also use the booted Windows 7 DVD Custom>Drive options to create and format the partition(s). Using this method the installer will issue the 100mb System Reserved boot partition which conveniently places the Repair console on the F8 Advanced Boot Tools menu. Clean Install Windows 7
Unplug all other HD's and peripherals to try install.
If install fails again: Make sure you have the latest BIOS update. If so, reset the CMOS: Clear CMOS - 3 Ways to Clear the CMOS - Reset BIOS
While in BIOS setup, set SATA controller to AHCI first, then if that fails try IDE mode.
Next Remove all but 2gb RAM to try install.