Windows 7: Recovery disk failure!

First of all, my other computer was running slowly so I made a recovery disk via the control panel and then booted the disk. I chose the option to set my system to factory settings and it took me to this ACER eManagement thing which gave me the same options. After about a while of loading, my computer rebooted but I end up with a loading screen that says "set up is starting services" and I get an error immediately after saying "Windows couldn't complete installation. To install windows on this computer, restart the application." I click OK and then it reboots and gives the same exact (setup is starting services) loading screen screen and the same (windows couldn't complete installation....) I need to desperately use that computer and ANY help right now would be much appreciated.

My specs are:

Windows 7 Home 64 bit
Intel core i7 870
Nvidia GT 320 - 1GB
420GB Hard-drive
4GB RAM



Thanks

As you are running Factory Recovery, you should have made your REcovery Disk set in case it failed when run from the Recovery Partition on the HD.

There are a few things you can try. Failure at this stage of install can be a driver hanging during setup. Try using this method to enter the Device Manager during install to uninstall any drivers showing in error - in particular the Display driver is the usual culprit. This may let the install complete so you can update the driver from the desktop.
Device Manager - Access During Windows 7 Installation

If this fails, you'll need to order your Recovery Disk set from Acer Tech Support, or find a Windows 7 installer for your version to clean reinstall using the Product Key on the COA sticker: Reinstalling Windows 7

Check the hard drive with the manufacturer's diagnostic tools.
Hard Drive Diagnostics Tools and Utilities (Storage) - TACKtech Corp.
HD Diagnostic

Manual how to use Acer eRecovery Management here:
ftp://ftp.support.acer-euro.com/notebook/empowering_technology/NB%20ET2%20user's%20guide/Acer%20eRecovery%20Management%20English.pdf

Have you tried pressing <Alt+F10> at boot up, to goto the Acer eRecovery Management.
Acer Support: Frequently Asked Questions list for How to use Acer eRecovery

You can Order Acer recovery disks from here:
https://secure.tx.acer.com/RCDB/Main.aspx?brand=acer