Fascinating thread. I am having a similar on going problem with an i7 Envy.. but, in my case, I have no problem working through the install, but, when it gets to the end and is preparing the OS, it comes up with a message in a black window -:The Computer Restarted unexpectedly or encountered an unexpected error. Windows installation cannot proceed. To install Windows, click OK to restart the computer and then restart the installation".
There are no other working keys, and pressing enter /restart) will only take me through the procedure again. My partitions are normal, and I am able to install any version of Windows 7 without problems, so it looks a possible hardware driver issue.