Error code 007B on Dell Inspiron - any ideas?

Hi, I hope someone can help.
I have a Dell Inspiron mini with a BSOD issue: The error code is 0x0000007B (0xF79E8524, 0xC0000034, ....)
I can’t start up in Safe Mode. The HDD is Seagate, I have run seatools/DOS which gives the all-clear. I have run all internal Dell diagnostics, all OK. I have tried both repairing and reinstalling Windows (running XP) from the original Dell disc supplied, from XP pro and home. When trying to do a new installation I can’t get past the F8 to agree screen, F8 does nothing so left with no choice but esc to disagree/quit. When tring to repair installation as soon as I have pressed R I’m then taken to a screen which tells me to type exit at the prompt, and can’t get any further.
I now have no idea whether this is a hardware or software issue, any advice or ideas will be much appreciated.
 
Re:unable to go past F8 screen

I would rather answer this instead of the bluescreen error. Coz the blue screen is for inaccessible boot device, MFR is not able to find MBR to direct the computer to start. Now for F8 not working, try to load the BIOS to default and make you disk drive as the first boot device and then try.
 
A bit of progress..

Thanks for everyones comments and suggestions so far. This gave me a bit of confidence to pursue the software option. So, I finally managed to get going on the Windows reinstallation. Had to press ‘Fn’ at the same time as F8, don’t know why as all the other F keys had been OK. Formatted the HD to do a complete clean installation. So far so good. After putting in the product key the installation started coming up with missing files, for example cmprops.dll, mofcomp.exe. By the way this was a genuine windows CD, XP Home SP2. I did try copying the System directory on to a flash drive using my other PC in the hope that the installation would then find those files but the drive wasn’t picked up. So I just carried on with the installation having got that far. Rebooted OK once the installation was finished but obviously there are problems. At first glance the main problems with the installation seem to be with Internet Explorer but I haven’t had time to check everything.
Does anyone have any idea why the installation missed these files? Is it worth me trying with a XP Pro SP3 CD? Or how can I repair the current installation? I have already tried, since the installation, inserting the CD without booting from it and trying to install additional features, no luck.
I am so grateful to anyone who has already replied to my post. Due to lack of time to try things out it does take me a day or two to respond.
 
All sorted now thanks

Slight delay as have been away for a couple of weeks. Anyway, all sorted! In the end it seemed to be either a scratched XP disc or a bad connection between the drive and laptop, so changed the CD, checked connections etc, lots of patience and got there in the end.
Simple really but thank you SO much to everyones suggestions. I did think it was a hardware issue to start with. Took it in to local computer repair shop who wouldn't even take it out of its case for less than £40.00, told me it was almost defintely the HD. I know he has to earn a living but not very helpful. It was only suggestions here that gave me the confidence to try a different approach.
 
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