Of coarse, it could be the fact that the win7 OS is OEM and he is trying to put it in a new PC ( well new case, MOBO, CPU, and RAM but same Hard drive, CD, GPU) . I don't know. I told him to buy a new OS ,but he wanted to at least try first.
OK - I think there is more issues than that. I am actually trying myself now rather than via hear say. Tried booting myself "normally" after being in bios and saw a blue screen that flashed instantly and then it made the system reboot which brought you back to screen that asked if you wanted to boot normally or in repair mode. Then tried in repair mode and that when the USB's shutdown.
Different hardware profile for Windows 7. You have a 50/50 shot of being able to just switch the drive over...I've only ever seen it work with Win7 Pro. You're gonna have to reinstall the OS from scratch if it's BSOD'ing on startup from being in a different machine, as there's no "repair" option to get rid of the old hardware profile. Even running Sysprep before swapping the drive doesn't always work.