The gdiplus.dll file is probably corrupted. Go to this site and download the file and replace it.
Try this to install when it locks up. When the install locks up, if it asks for the file, have it copied ahead of time on a floppy. Then put in the floppy hit browse and tell it to go look in the A drive. I had a similar problem with my AGP driver files once doing a repair install. Also some times the install looks like it has locked up during the registering components section. If you have unsigned drivers like for the mobo or something it will happen during a reinstall.