Acer Aspire 5349-2899 locked "Setup is installing services"

My grandkids destroyed their computer. Don't know what they did but getting "setup is starting services" and it's frozen. Am not able to get past it. Did try one suggestion:

On the same error screen press SHIFT+F10 and it will open up a black Window. (a command prompt window) 2) In the black windows type the word "regedit"(without the inverted commas and hit enter. That will open the registry editor. In the Registry Editor.. Browse to.... HKLocal machine/SYSTEM/SETUP/STATUS/ChildCompletion, and after highlighting childcompletion,on the right hand side check for setup.exe. if the value is 1 change it to 3.(by double clicking on setup.exe and changing the value shown in the box). Then close the registry editor and then also close the black window. Then click on OK for the error and the computer will restart and the installation may complete.

This did not work. The kids did not make backup discs either. To avoid this nonsense in the future I purchased OEM version of Windows 7 Home Prem 7 SPI 64-bit. I figured I would just changed the boot sequence to CD-ROM and just do a clean install with the new disc.

Lots of luck, it accesses the disc, but still does "Setup is installing services" and freezes there. Apparently, it's still trying to do a recovery? I don't know how to get around this. Any ideas? Would getting a new hard drive (more money down the drain) and then do a new install get me out of this mess?
Have no interest in saving anything on this computer so data loss is not a problem.

Currently has Microsoft Windows 7 Home Premium 64-bit Edition.

Thanks for any help.

Would getting a new hard drive (more money down the drain)

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

Well low and behold, I went and tried again, but this time (after fighting with the f keys to get the bios up) it was still set to boot from CD-Rom, however, there was another option that activated the f-12 key to select boot sequence (f-12 didn't work before because disabled in the bios). I set that and then restarted and hit the f-12 key. I again selected the CD-Rom as first boot sequence. Then at that point the new Windows 7 CD already inserted kicked in and I was able to start a new install. I had the option of doing a repair, but figured because the Windows key was different it would just just cause more problems, besides I think the laptop was infected with a virus.

I have a hard time seeing how the bios set for CD-Rom as first boot sequence directly in the bios failed to work , but enabling the f-12 key in bios, save, and then restart, hit the f-12 key now active, select CD-ROM as first boot sequence (even though already selected in bios directly) and then I was able to start the install. Strange! Must be something about the processing sequence that overrides with the f-12 key, but not directly from the bios. Never thought there might be a difference setting boot sequence one way or the other.

My clean install has finished and up and working. Thanks for your response.

It is not necessary to buy a new copy of Win7 as the one which came with that PC can be reinstalled as often as you like for as long as the PC mobo lives. Just use the Product Key on the COA sticker as shown in Clean Reinstall - Factory OEM Windows 7. The installer is also provided there; Win7 installers are the same for either retail or OEM.

If you haven't yet activated the new copy you bought I'd save it for elsewhere so you dont' throw away $100+ value of the old Product Key for no reason. MS Customer Service will help you if it's too late. Just tell them you installed it on the wrong PC and want to activate with that PC"s native OEM Product Key of the COA sticker.