Rebooting Trouble?

I have a Dell Desktop, Intel Pentium 4 Processor that runs Windows XP Home Edition (at least it used to). When ever I run it I end up at a menu that says that the computer needs to start in: Safe Mode, Safe Mode w/ networking, Safe Mode Command Prompt, Last Known Configuration, and Start Windows Normally. However, when I choose any one of the options, the computer always ends up in the "Blue Screen of Death." In an attempt to solve this problem I tried repairing windows which I have tried and has not worked. In another attempt I backed up all my files and tried to install a fresh-new version of Windows XP Home Edition. However when I arrive at one part, it states that setup needs to create a folder ( \WINDOWS\system32\spools ) but when ever setup runs it doesnt work (I'm running this from a CD). and the setup program states that it cannot create the cfolder. Anybody have any ideas how I can get back my Windows XP Home ?? Help is greatly appriciated.