Factory Install Error

I have a Compaq Presario SR1817CL pc that I am working on. It has a factory restore partition and they restore works great. When I try to do any updates the update fails. First I installed SP2 and when the machine restarted it would only boot into a black screen that wanted me to start in safe mode, last known good config, etc. It would just stay in this loop with each boot.

I then downloaded and installed SP 3. Same this over again.

The black screen made mention of a hardware problem, but this machine has not had anything added to it.

Any suggestions?