Thanks for all the suggestions,It looks like it is a hardware problem I removed the graphics card and plugged into the motherboard graphics chipset and it lnstalled ok as per the instructions.
I then reinstalled the graphic card and it blue screened on bootup and went into safe mode etc there was an error log.So what was happening was : with the faulty graphic card installed, windows downloaded the files correctly and on reboot due to the faulty graphic card went into safe mode thus preventing the install with the message "can't install from safe mode."
The fan on the graphic card was full of dust and very noisy so I guess it overheated.
As XP loaded ok it looks like windows 7 is more sensitive to the hardware condition
Thanks again great forum