if the problem is exactly when windows "installing devices", and the process halted, then there must be something wrong with any of the devices, when the problem is reinstalling windows as i perceive that your previous system contain nothing as any hardware malfunction, there should be nothing wrong with your hard drive. If your bios is set the way it is used to be, then you dont have any need to go there. Windows XP is a bit "sensitive" on the hardware it should scan within the installation process, it might look good on your bios (even on any other version of windows), but it wouldnt always look good on xp. Im talking about a little loose, unfitting placement of your cables as well as pci cards (graphic, audio etc), your memory modules, dusty slots, and stuffs like that. Try to open your pc case, remove the cards, clean the elements and the slots with any fine brush (dont blow it with your mouth, youll never know what will happen), then put them back again. Resume the process of reinstalling (XP's is the easiest one, aint it?), i hope youll do fine. Fresh install of windows is best in most cases, the problem is when you allready have emotional relationship with other programs you have installed
and if the problem is exactly like ive stated before, fresh install wouldnt do you any good. Good look then.