The normal situation is the Windows is loading files will take a few minutes. It has a black and white bar along the bottom which is a progress bar. If you are getting the video you show during that period, something is really messed up.
And no, I have not seen this problem before.
I did not mean to infer it was a pirated copy, but maybe a student download you had burned yourself.
You aren't trying to do an in-place upgrade, since you can't do that from XP.
I haven't heard of any viruses that were causing problems, but something to think about.
I would probably get a new hard drive and try to install to it. Then you could eliminate any prior problems.