|the performance difference between those 2 cpus is not huge.|
plus they're not compatible with the same motherboards - the AMD Athlon socket is totally different from the P4 socket 478, so you won't be able to swap those 2 CPUs.
i would think, though, that a slow PC would produce a crappy gaming experience but shouldn't prevent the installation. perhaps there's something else going on.
I would run memtest on your RAM to verify that it is still good. Errors could indicate bad RAM, which can often cause installation errors.
Bad/corrupt hard disk drive (hdd) sectors can also cause installation issues. running "chkdsk /r /x" will allow your OS to mark any bad sectors as unusable, instead of trying to install software to them.