Yes, it's an E6600 at stock, 4870 and 5GB of RAM. Motheboard is a GA DS3.
I just deleted the partition, formatted and reinstalled. Exactly the same problem.
I have no VGA cable or HDMI adapter so can't do it from the motherboard's onboard graphics.
I don't think this is a gfx card problem. I have a feeling it's a hard disk problem. W7 was behaving strangely - i.e. stalling a lot, hence the reason for the reinstall.
The bit that it's having difficulty with is "preparing Windows 7 setup for first usage".