Stuck at Startup Screen (Windows 7)

So I think this one requires a bit of background.

Initial Problem
The initial problem was the my computer had some errors that were causing WoW to shut down (errors #132 and #134) if that's relevant. Did some looking online, suggested cleaning out a few WoW folders, updating graphics card drivers and moving on. Seemed to make the situation worse. Eventually got to the point where I was stuck in a loop of the computer restarting, getting to the xp startup screen and then restarting. Entered setup trying to see if messing with the settings a bit would help. It didn't and I was no longer able to get the keyboard working. Saw that this was beyond my abilities and brought it to my school's RESNET to let them take a crack at it. They managed to get it to boot Windows XP properly and I took it home. Plugged in my keyboard and mouse and found they were still not working.

Current Problem
Brought it back to Resnet. Called me up and told me to come make a backup disc because what they were doing could potentially wipe the hard drive. I had nothing on there I felt I really needed, so I passed and the hard drive got formatted. They were putting XP back on it and needed my product key. Found the sleeve my disc came in and read it to them, came up as invalid when they were installing it. Told me it had something to do with the fact that my version was OEM. Tried to get an explanation about what that meant but couldn't really get what they were telling me. Suggested an alternative of not registering windows and buying Windows 7. I had heard good things about Windows 7 and had been planning to upgrade soon anyways and it was cheaper through my school, so I figured what the hell. They suggested upgrading from Vista, but wasn't much interested in buying Vista only to replace it, SO I checked around about upgrading from XP right to 7, seemed possible if I didn't mind losing my stuff, which at this point there was nothing to lose anyways, so I go with the "Custom Download" option on the 32-bit version (Still not sure if the 32/64 bit option was the right one for me, but it said you should have 4 GB of RAM if you pick the 64 bit, which I only have 2GB). downloaded all the stuff, got the install process going. It restarts itself and comes to the new Windows 7 startup screen and then freezes, about half an hour goes by, I decided to leave it overnight just in case. I come back the next morning, turn on the monitor, no change, still the Windows symbol with the words "Windows Starting" under it. I restart it and it starts up properly after putting up a screen for about a split second that had the option "Start Windows 7 Normally" highlighted, not enough time to read anything or change anything. It gets past the startup screen and seems to be working on the second install option "Expanding Windows Files" or something to that effect. It restarts itself and goes back to freezing at the "Windows Starting" screen. Tried a number of restarts, everytime that screen with "Start Windows 7 Normally pops up for about a split second before going to the Windows Starting Screen. Tried leaving it for a few hours and then restarting, but still no good.

Sorry for the long story, but any help/advice would be sincerely appreciated.
-MM

 

Could you please post the specifications of the computer?

If it is a manufacturer's model, the manufacturer and model names should be fine.

 

This is actually not a manufacturers model, a ordered the parts online and a friend assembled it for me. Are there more specific specs you were looking for? I'll do my best to provide them.

 

If you could just answre the two following questions, I think it would cover it:

1. When was the computer built?

2. Was is built specifically as a high-end machine, normal, or low-end?

 

Managed to get Windows 7 up and running by booting from the Vista upgrade anytime CD and then doing an upgrade to Windows 7 rather than a custom install. Found some great resources here and installed AVG antivirus and CCcleaner. However, I seem to be back at square one. Whenever I start up WoW I end up with this on my monitor:

http://img510.imageshack.us/img510/6109/babbette037.th.jpg

This is pretty much a fresh install, Windows is completely updated and says my graphics card drivers are up to date. Other things besides Warcraft have caused this effect, but that's what seems to cause it to occur primarily. Not really certain if this is a hardware or a software issue.

My Computer is has an AMD Athlon(tm)64 X2 Dual Core Processor 5200+ 2.61 GHz, 2 GB of RAM, 32-bit Operating System, Display Adapter is NVIDIA GeForce 7900 GT/GTO (Microsoft Corporation - WDDM) and the Monitor is a Chimei CMV 221D 22" monitor. If there is anything else you need to know please let me know.