So the actual install has failed.. First option would be to run a fresh install formatting the disc first
If that again fails, is the system 32 or 64 bit
I tired several times with several registerd W7 DVDs. No luck.
So I decided the following.
1. I upgraded my two working desktops to W8-Pro since I have two registered DVD's for W8-Pro
2. I then converted the computer that wouldn't install W7 to Ubuntu. I have used Ubuntu on and off for years so I was comfortable doing this. I had no problems intalling Ubuntun 12.10 on the computer that would not install W7 and which the avast! Rescue Disk indicated that HIberfil.sys in W7 was infected. I did a clean install of Ubuntu after reformatting the disk. Everything is working fine.
3. Since avast! has had a number of issues with W8 I decided to use Windows Defender on the two computers that I upgraded to W8-Pro.
4. I then installed a trial version of Malwarebytes Pro on the two W8 computers. No problem there.
5. Then after I made the OP on this subject I noticed that Bitdefender had released a new product Bitdefender AV Free which Bitdefender says is compatible with W8. During the installaton process of Bitdefender AV Free it disabled Windows Defender. Windows 8 had no problem with this. However, during the isntallation of Bitdefender AV Free it did a forced uninstall of Malwarebytes Pro. I have contacted both Bitdefender and Malwarebytes about this and await an answer.
So as it stands now I am not using any avast! products on my three computers. At some point I may reinstall avast! AIS on the two computers that now have Bitdefender AV Free on them and then reinstall Malwarebytes Pro. However, at this time due to the numerous issues regarding using avast! 7 on W8 I will continue to use Bitdefender AV Free.
Thanks for your help on this.