I have solved it!
I rebooted and hit F8 (something I haven't had to do on a PC since 1995 and completely forgot about). I selected "Repair Your Computer" and selected the first option that came up (something dealing with tools to repair issues) It went through and scanned with a bunch of different tools, the last one being CHKDSK. Didn't take long at all - more than 5 minutes, but less than 1/2 hour. The only error was found by - surprise, surprise - CHKDSK. The error was an issue with the System Volume and it was automatically repaired.
Prior to doing this I uninstalled Avira as there was some chatter about it being a problem (plus it has these annoying popups). That didn't fix it outright so may not be related at all, but who knows.
Anyway I went and reinstalled the secure app from my university and rebooted. No problems. Installed MSE (in replacement of Avira). rebooted. No problems.
Now I do have two follow-up question?:
1. Is this a type of problem that is hardware related and as such will just come back anyway so I should
still exchange my PC for a new one? (I have 25 days left in 'no questions asked' return/exchange and they have done so for me in the past for something that was clearly my fault with an external hard drive). I would rather not if it is just a software thing and is resolved.
2. Where would one find information on this 'system volume' issue so I can learn what may have caused it in the first place?
Thanks for everyone's input. I really appreciate the support.
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do the HP's come with factory re-install software? could you try to reformat the computer to factory (yes, i know they are brand new and in essence, factory already) defaults?
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This was actually what I was originally attempting (doesn't comes with disks, but a separate partition.. made my own disks, though), but then figured it wouldn't hurt to try the scans first.