You may have a bad hard drive here since XP won't install either. Here are some HDD diagnostic tools. 7 Free Hard Drive Testing Software Tools
You may need to put the drive in an external enclosure to test it or attach it to another PC with cables and test it with it laying outside of the case.
The Win XP install would need the Sata Controller drivers, before installing.
Buy a legit copy. Appears that you have a 64-bit laptop. You will need to get a 64-bit version of Win 7.
The easy way out is to buy Win 7 and buy a harddrive for the laptop. Install Win 7 clean on a new hdd (or ssd).
Do you still have the COA sticker on the bottom of the laptop?
Clean Install : Factory COA Activation Key
Clean Install Windows 7 to Remove Factory Bloatware
Clean Install Windows 7
How to Do a Clean Installation with Windows 7
Clean Install with a Upgrade Windows 7 Version
How to Do a Clean Install with a Upgrade Windows 7 Version
SSD / HDD : Optimize for Windows Reinstallation
How to Ready an SSD to Re-Install an Operating System
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