Windows 7 OEM install hangs on new barebones kit

I just bought a barebones kit with the following:

- MSI H61M-P23 with a Core i3-2100 processor
- 8 GB DDR3
- 500 GB Western Digital Caviar Green SATA drive WD5000AZRX
- Optiarc DVD RW

I also purchased Windows 7 Home Premium OEM on DVD.

I assembled the PC and booted the BIOS without any problem. When booting from the Windows 7 install DVD to install windows, the system starts up, unpacks files, and then hangs right after drawing one tiny orange circle of the Windows logo. Waiting for an indefinite amount of time doesn't help.

I then disconnected the SATA drive and attached an external USB2.0 hard drive. The Windows 7 install disk booted, but refused to install W7 on an external USB hard drive.

Re-attaching the internal SATA drive, I was able to boot the W7 install disk, and install W7 on the SATA drive. However, if I disconnect or turn off the external USB2.0 drive, the system hangs at exactly the same place as when I first tried to install Windows 7. Once Windows has booted, I can turn off the external drive and Windows continues to run unaffected.

I'm posting this from the new PC, so I'm assuming the hardware is OK and I've either mis-configured something, or failed to install some needed driver.

Any ideas?

Thanks in advance.

Re-check all your connections to your mobo...PCI cards, RAM and cables.