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Vista Reinstallation Problems.

Hello all,
I was wondering if someone can help me. I have one of my close friends laptop which I do intend to fix for them. Its a Dell Inspiron 1525 on Vista Home Basic. To cut a long story short her sons were arguing over the laptop so my friend just closed the lid. But when coming to turn it back on it wouldnt boot up properly and would go into the repair function but this can go on for hours and hours without finishing, or if it did it couldnt fix the issues. I have tried to boot into safe mode but this would hang on BTHidmgr.sys which I know has something to do with a bluetooth device. I have tried to even do a clean install but this doesnt work either it would install the files but wouldnt load up without coming up with numerous errors. At the moment I have install Xp on to see if this worked and it does, then tried to revert back to Vista but it still will not work. I have tried formatting partitions, deleting partitions nothing seems to be working. And the warranty for the laptop has run out and I cant justify spending hours on the phone to dell and it costing me a bomb or just to get no where. Can someone help as I'm out of ideas of what to do. Could this be a faulty Vista DVD or is the HD damaged or maybe something else. If I can install Xp why will it not let me install Vista. Someone said you cannot reinstall Vista if it was an upgrade if thats the case then why have they sent me a reinstallation disk. Please help
Many Thanks everyone who replies.

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