Blue screen of death while installing Windows XP SP2

I am receiving an error while starting Windows XP on my ten year old computer (D845PEBT2) that says

Windows cannot start because the following file is missing or corrupt: 

Windows\system32\config\system 
You can attempt to repair this file
Run setup from CD
Press 'r' on the setup screen

In the safe mode and every other mode that is available in the list of startup options, I receive the same error message.

I tried to install another operating system (Windows 2002 SP2), but when the setup is running, the files are copied successfully from the CD and when it says trying to detect previous operating systems, I receive a blue screen that says:

A problem has been detected and windows has been shut down to prevent damage 
to your computer. 

BAD_POOL_CALLER 
Check to make sure any new hardware or software is properly installed     
Remove BIOS memory options such as caching or shadowing 
STOP: 0x000000C2 (0x00000043, 0xC2C5A000, 0x00000000, 0x00000000)

Very good chance that this is bad memory, and not a software problem at all. Try running a memory test tool, like MemTest86.