<< "detecting new hardware" status bar takes about 4 minutes to get to 100%. >>
Changing the cluster size smaller may slow your computer a little, but likely won't cause your install to hang detecting hardware. Try installing with the bare minimum of hardware first, and adding your other stuff after a successful OS install.
More info such as, which of your sig rigs are you installing and which version of Windows may be helpful.
PS, the smaller cluster size will basically give you more storage on your hardrive(especially if you have alot of small files) due to the smaller amout of space allocated for the same file, as in: a 2k text file will take up 4k of your hardrive if you're using a cluster size of 4k, but 32k of your hardrive if you're using 32k clusters, so if ALL of your files were those 2k text files, you could put 8x as many in your hardrive with 4k clusters compared to 32k clusters.