1. Apparently when you want to make a bootable CD from an ISO image, the CD burner program must be told to treat it as an "image burn" not a "file burn", otherwise you're just saving another file to CD. Lots of tutorials on web thru google, but this post thread gave me some quick insight:
http://forums.majorgeeks.com/showthread.php?t=1064292. Test Memory Modules and Slots. If you get memory errors during the test runs, record the locations. Then run the memory test again. If you don't get the same "bad" memory locations, the problem is probably outside of your memory module. Start with just one memory module, the 512MB. You might want to try it in different slots. After you have completely tested it (possibly verify all three slots are working if motherboard allows it), pull it out, and test the new 1GB memory module. Then if both modules test good, test them together to see if they're compatible with each other. Put larger one in front of smaller one. If that doesn't work put smaller one in front of larger one.
If you get the same bad memory locations each time, that module is probably bad or incompatible with your motherboard.
3. If system doesn't stay up long enough to test, I would look elsewhere for the problem, but continue to use the memory test to verify future changes have resolved the problem. If it's hanging on the memory test, your Windows operating system software and drivers were not the problem. I'd look to heat, bad/loose connections, and bad hardware (I'm not sure about power). You can either start with nothing and add on or start with everything and take off components.
4. Since it usually boots up, I'd start with power supply, motherboard, CPU, one stick of memory (probably 512MB), video card, monitor, keyboard, mouse, and floppy drive. There's also your BIOS configuration in CMOS. If you can't run in a minimal configuration you might want to reset your BIOS to its factory default settings.
5. Heat. I believe there are heat sensors on your motherboard that you may be able to read during CMOS setup. See what the temperature readings are. Generally if you remove heat sink/fan from CPU you need to reapply a thermal compound/paste between the connecting surfaces to help draw heat off CPU. Are all your fans supposed to be working?
6. IDE Cable. If you're using the newer PATA hard drives that operate at 66/100/133 (something?), you should have an 80-wire flat ribbon cable with a 40-pin connector. At those higher throughput speeds the old 40-wire cable won't cut it (will cause problems).
7. Hard Drive. What shape is your hard drive in? Most hard disk drive manufacturers have diagnostic programs on their web sites that you can download and run to check the integrity of the drive and its disk surfaces.