Are you inserting the disk or booting to it? You DO NOT want to upgrade from Vista so you want to set your BIOS to boot from the DVD and install in another partition or on top of the Vista partition. Your data will be saved in a windows.old folder if you install on top of Vista.
Check out this link as a possible cure.... http://windows7forums.com/windows-7-installation-upgrade/40798-screen-goes-black-pc-does-not-hang-after-first-stage-installation-solved.html
I would suggest running a Hard Disk Diagnosis Utility like Crystal Disk Info Download - Check at any time the status of your hard drive and its temperature. before proceeding further.
Use MSCONFIG (from a command prompt) to disable all boot items and non-M$ services. If your CPU usage drops, start adding things back a few at a time and see what is causing the problem(s).
This may be a bit draconian but you can always use the Win7 Boot Disk to do an install (clean, not upgrade) on top of the existing partition. It will save all of your data in a file called windows.old but you will have to reinstall your apps. At least you can use your computuer again.
Assuming you have SATA Drives, I would disconnect the 500g (D) and see if you can boot to the smaller drive (C). If you can't you are going to have to rely on booting to the system disk and doing a system repair. With the 500g drive disconnected, you should repair the smaller drive making it...
This might be video related. If so, you might want to consider a previous post that had a solution... http://windows7forums.com/windows-7-installation-upgrade/40798-screen-goes-black-pc-does-not-hang-after-first-stage-installation-solved.html
BootItNG or Acronis (Drive Manager) will both do what you want to do. You are imaging with these utilities and do not have to reinstall. (BootItNG has a trial -- get to either by Googling.)
Can you boot to a CD/DVD in DOS? You failed to mention if this is an IDE or SATA Drive. You might have issues in your BIOS with a SATA Drive or maybe wrong jumper setting with an IDE Drive.
If you mean your BIOS boot screen only shows 6 gig of memory then I wouldn't expect Win7 to access more than 6 gig. Have you tried reseating your memory, swapping memory sticks, etc.?
If removing your USBs doesn't fix the problem, use MSCONFIG to remove all 3rd party programs from running at startup and disable all non-Microsoft Services at startup. If you don't crash for awhile, you can try adding them back a few at a time. There are a few programs and services that can...