Here are my suggestions: Download the drive utilities from your hard disk maker and run whatever passes for an extended drive test; if the drive passes, then use the disk utility to do a low-level format of the drive--I believe the WD or Maxtor calls it Write Disk Pack or something similar; the object is to completely zero out the drive so you can Fdisk, partition, and reformat (be sure you completely power off the system between these steps, not just a restart) the drive prior to attempting a totally clean install--if it fails, you've discovered your problem and can then RMA or, if that's no option look for another drive.
Next, pare down your system so all you have installed is one stick of memory, a floppy, cdrom, vid card, and your hard drive. Once that's done clear the CMOS via jumper or removing the battery, enter your bios setup and load the Failsafe Defaults and date/time info or whatever they're called in your particular bios and make sure you completely disable any USB devices.
Now you can get down to business by booting with your W98se or ME or XP boot floppy and taking it from there. If you continue to choke on the install, or can actually get an os installed, but lose it or it self-destructs on you, then you could have some more serious issues to tackle. It's always helpful to write down all those BSOD error codes when you have a chance so you can search the MS KnowledgeBase for the exact locations where the error is occurring and maybe find some clues as to what's happening. Good luck.