Older system artifacts when booting

[Jorsoft]

Okay so I'm playing around with this older Celeron system. Specs:
Celeron 700mhz
256mb ram
6gb Seagate hd
8mb ATI Rage Pro (pci)
52x cdrom + floppy

This computer will not boot from the hd or the floppy. Both have tested fine, but when I try and boot from a disk the computer hangs and when I try to boot Windows XP Pro setup from the hd the screen artifacts with ascii characters and then hangs. I am thinking either the mobo is bad or possibly the psu. I am running memtest on it right now.
I have a psu I can test it with, but I am wondering what everybody else thinks and if I can get some help with this one. I kinda want it for an older gaming system/internet machine.
No Brand, it's a white box.

edit: memtest came back fine.

 

[Nitestick]

i'm pretty sure i've seen the sort of "artifacting" you are talking about both with Win2K and WinXP installs gone awry. from memory my solution was a reformat as it was apparently a seriously corrupted operating system.

 

[Jorsoft]

This is a fresh install, and I've refortmatted twice anyways. I don't think that's it

I'm actually starting to think it's the cpu/fan, it's kinda dusty and I've had similar stuff happen before when this was the case. I'm gonna clean it up, apply AS5, and reinstall that. If that doesn't help I'll swap out the psu and possibly the hd.