Can't install windows 7 32 bit - receive BSOD

Hi Guys

My friend recently installed windows 7 ultimate 32 bit on his laptop, everything went perfect and is running fine.

He then decided to also upgrade his desktop, he had successfully installed it and was able to get to the log in screen without any problems, once typing in his password and logging into to windows, the screen would flicker and go black and blue and sometimes the pc would shut itself off. The error which we could make out before the screen went off was 'Kernel driver has stopEd responding.' something to that effect, I can't remember the exact message. But we managed to figure it was an issue with the nvidia drivers, as it seems to be a wide spread problem with nvidia GeForce cards (my friend has a 8600gt). Now since then we decided to format the hard drive and perform a fresh install of windows 7. Now this wer things get interesting.

We booted from CD and ran the windows 7 installation, when the screen comes up to ask which partition/hard drive you want to install on, we formatted the hard drive on this screen and then tried to perform an installation, the installation started, but stopped at some point and we received a blue screen, now weneva we attempt to boot from cd, the windows installations files are loaded and the windows starting logo is displayed, but then we receive the BSOD.

I cannot provide you with any dump files as there is not operating system, but I have taken a picture of the BSOD that we receiving.

System specs:

Biostar Tforce 965PT
Nvidia GeForce 8600GT 512mb
3gb Ram
Intel Core 2 Duo 2.13ghz