I'm attempting to install XP onto a new 160GB, single partition HDD. Booting from the original CD, I have selected the new drive (the original, 30GB HDD is slaved) and ensured it wasn't ...

Thanks, that was the problem. I forgot that about a week ago I had edited my Group Policies and disabled Windows Messenger. I change it from disabled to "not load on startup" and it works fine now.