It could be a jumper issue where Windows Isn't seeing the HDD/s correctly or that they are incorrectly jumpered on a 80 way IDE Cable and are messing with the system.
Those 80 Way Cables should have the Master Drive on the End and the Slave drive in the Middle connectors. Or set the Drives to CS Cable Select and allow the hardware to identify the drives as it wants to.
If you have more than 1 IDE Drive on the same IDE Chanel it's possible that the drives do not play well together I had that with a WD and Seagate Drive a while ago. The WD was the original and the owner wanted a new bigger drive fitted to continue using this system. The WD just wouldn't accept another drive as a Slave on the IDE lead.
But then again they didn't show in the BIOS Either. But while we are on the subject of BIOS what is actually showing here in the way of HDD/s, Optical Drives, RAM, and CPU?
If these are not correct it can cause the Windows Installer to go crazy. Also did you save the changes as you exited the BIOS?
If that is all correct Test the RAM with something like Mem Test to check it's function. I've had cases in the past where each Module tests OF but Windows can not install because of a Timing Issue between the different RAM Modules. The way around that was to remove all but 1 RAM Module Load Windows and then refit the RAM.
The Windows Installer is very fickle when it comes to timing issues with the RAM that Windows itself doesn't care about. I've also had faulty Ram in the past which has caused the Windows Installer to not find files on the install Disc. Not the same file every time but it always errors out on a unfound file before a Format is started. ;)
Col