I can't, because at the end of every installation, I'm forced to restore to Vista.All I might suggest right now is check the Windows\Panther directory for a file called setupact.log and see if the last few entries might help you see what is going wrong. You may have to copy the file to the desktop to read it.
I am not sure how the Win 7 RC fits into your problem, but you know you cannot upgrade normally form an RC version.
I can't, because at the end of every installation, I'm forced to restore to Vista.
I mentioned the RC because I can run the RC without any troubles. I can't clean install from the RC or from Vista, and I can't upgrade from Vista.
I did try a clean install while running on Vista, and at the end of the installation it still opened up the recovery tools and told me to restore.If you do a clean install, it'll never ask you to recover to Vista. Clean install with formatting hdd partition IS recommended .
( Clean Install Windows 7 - How to Perform a Clean Installation of Windows 7 - Part 1 of 3 )
It it were me, I would get another hard drive and try the install. Activating is another problem, but first things first.