Picked up this pc from the thrift store. Someone formatted the hard drive with a Windows 98 boot disk. When I turn it on you see "starting windows 98" then it boots to the dos prompt. When I try to install Windows 98SE it runs scandisk, drive checks out ok, and the Windows setup begins and thats when it freezes. I reformatted with a WinME boot disk and tried to install Me from my CD, same thing. Got out my Windows XP disk and tried and it always locks up in Windows Setup. I have tried different memory, took the sound card, network card, & modem out and tried to install a Windows operating system afterwards and it still locks up during the setup. What else could it be or something else that I need to try? Could it be the motherboard?

Try running memtest86 from a bootable floppy to check RAM integrity. Could be overheating too. Check the CPU fan and check for dirt and dust. Do not vacuum. Compressed air works best.

Unless you have more RAM than 128MB, don't bother with XP. Other than that, OtheHill covered the two main possibilities...heat or bad RAM. "If my answers frighten you then you should cease asking scary questions" - Jules Winnfield (Samuel L. Jackson) in Pulp Fiction

could be HDD too - boot to an XP CD and run chkdsk to check for bad sectors on the hard drive.

Upandcoming The OP is trying to install WinME. Booting to a WinXP CD would not be appropriate even if the OP has one. The OP already ran scandisk.

If you know the manufacturer of the hard disk in the faulty PC head over to there web site and download a bootable CD or floppy image to test the hard disk Tim

I agree with the running of memtest for an hour or two, and running win98's 'scandisk /surface' should check out the hard drive pretty well.