I worked on a dell one time that would do the sam thing , it would go through a full format , but when it would restart to do the windows install it would freeze . It showed a BSOD a few times , but not often . Do you have a spare stick of ram to try in it ? AS Roo said , try without the audigy and any other non essential pci cards in it . Another thing you could check ,but prolly unlikley , is a heat issue . Jump into the bios and make sure that its not cooking something .
Edit
now that im thinking about it , is it an sata hard drive? If so you might need the drivers for it . I dont know if it would let you format it without the drivers or not so im just throwing this out there . Another thing you could try is at the point of where windows starts the install and says press f6 for third party drivers , hit F5 and use the standard PC HAL . You could be having an issue with the acpi HAL that new xp installs default to . GL