Windows XP Repair Install Hangs at "Setup is Restarting......"

Okay, I am currently running a Windows XP Repair installation on a friend's PC. The repair installation would freeze at the 34 minute mark during the "installing devices" section. In order to try to repair this, I loaded the windows xp recovery console and deleted a couple of files from the C:\Windows\System32\Drivers folder like I had been told to do in another forum.

However, after this, the computer began to freeze at the blue "Setup is Restarting......" screen. I would not like to do a clean install because there are a couple of programs on the computer that have data which have not been saved into files. Quickbooks and Act 2006 do not create backup files of contacts and things unless you explicitly back them up, and that has not been done in the past few days. I would prefer not to lose this data and as a result, would like to get the repair installation to progress and finish.

I have tried running chkdsk c: /r to no avail, and have tried to re-do the repair installation, but am only given the option to reformat the comptuer. I plan on trying to run ERD and see if i can access a couple of programs. ANY suggestions are welcome!

Plllleeeeaaaase help meeeeee! I am desperate ....

Thanks for your time!

If no better suggestions, can you put the hdd in another computer and back up the data and then do a clean install?

After googling & browsing through tons of pages I found several solutions. But first of all i describe what really worked in my case.

So the problem is "windows installation (update) restarts at 34th minute".
Here's my solution that worked.
First of all after restart press F8 then choose debug mode, let the installation go through once again.
Then eject installation CD, let the setup run again, but this time when the process asks you for installation CD press SHIFT+F10. Now you have cmd line. In system root (c:\windows or c:\winnt) there has to be a file named setupapi.txt. Open it and look last 10 strings, there must be writen what caused the restart (driver update or smth like that) in my case that was oem2.inf required restart after updating ASUS display enhaced driver. In your case this can be any driver.
So in the previously opened cmd i typed "appwiz.cpl" and uninstalled this ASUS display enhanced driver.
Then restarted and again with F8 i started the installation in debug mode (for any case). Well, the process ended successfuly.

Well, here are the list of solutions which can save your life, nerves, time & precious data.

First things first, CHECK your HDD for possible problems. Plug your HDD to another PC or boot from CD or USB drive. The simple command "chkdsk c: /f /r" is worth many things.

Second, check any virtual driver or real driver compatibility with windows. If it's incompatible - uninstall it!
You may find if its working or not by following the procedure written above.
Or you can by typing in cmd sysdm.cpl and opening drivers tab disable it. In some cases it may not work.
If the system restarts right after you disabled some driver, the you have to uninstall it via appwiz.

Second and a half. If your video card is ATI, before updating uninstall it! Or disable it in drivers tab.

Third, some motherboards may not work well with USB devices (mouse, keyboard, CD/ DVD drives), so
try disabling USB in BIOS and install with PS/2 mouse & keyboard.

Fourth, if your PC has two or more memory sticks try leaving only one, one the first slot.

Sixth, your OS may be infected with various trojans, keyloggers, viruses or rootkits. Unplug your HDD and check it on clean system with good antivurus app (Kaspersky, Symantec, Panda).

Seventh, in rare cases there could be deleted some system files, so if nothing works try repair system with your XP installation CD.

Good luck!