Kernel Panic (Maybe?)

It's a "true" kernel panic, all right--there's no such thing as a false one.

The cause, however, is probably the way you formatted the drive, not a hardware problem. I'm a little surprised it panic'd instead of just refusing to install, but regardless I'm fairly certain OSX will refuse to install on a drive formatted through Windows. In fact, you can't even install Windows if you partition the drive from Disk Utility in the installer--you MUST create the partition through the Boot Camp utility after OSX is already installed (I learned this the hard way at work after pre-partitioning and clean installing OSX).

Presumably the Boot Camp installer does some magic to the partition scheme to allow OSX to boot from EFI and XP (etc) to boot with BIOS emulation. If you partition the drive through XP, there's no question that magic isn't happening. Further, XP isn't going to create a GUID partition table that OSX needs to boot, so you wouldn'tve been able to install OSX on the free partition anyway.

You're going to need to use Disk Utility from the OSX install disc to reparition the drive as a single-partition GUID volume (Disk Utility is accessible through the installer's menus, and it's pretty self-explanatory--there are also plenty of threads here explaining how to partition with it). Then, after installing OSX on that partition, do the Boot Camp dance.

Of course, wiping the drive again to get at it if the OSX installer is crashing on boot is a little tricky (sounds like maybe you're stuck booting into BIOS emulation?); maybe use the XP disc to completely wipe the drive, then see if you can get the Mac installer to boot.

If that doesn't work you might try resetting the PRAM (command-option-P-R at powerup until it chimes a couple of times) or doing an SMC reset (check Apple's KBase for the method on your particular model). It's possible you had a coincidental hardware failure at exactly the wrong moment, but probably not.

Or, maybe someone else knows what's up.

 

Did you try just running Disk Utility rather than installing OSX? Or does it panic before you get as far as choosing DU?

 

Ok, if it's freezing on the hardware test disc, it does sound an awful lot like a weirdly timed hardware failure.

That said, the fact that you can get XP to install and boot is awfully strange if there's a motherboard or drive problem severe enough to be crashing even the hardware test.

Assuming that's the case, that narrows it down to either the optical drive or the optical disc itself.

So: Can you still get it to boot from the XP install disc (or otherwise test that the drive is working via XP)? If so, is your OS install on the same physical disc as the hardware test? (That is, are you using the disc that came with the machine to install the OS?)

If yes, then I'd be rather inclined to think that you just have a bad install disc--see if you can see any scratches on it and maybe buff the underside a bit. If you can find another OS install disc (try a friend, or if you haven't already even pay the $30 for a Snow Leopard disc), try that and see if you can get that to boot.

One other question: Have you installed the full Boot Camp tools into XP, and are you then selecting the "Boot to Mac" option before booting into the OS install disc? If there's something weird going on in the EFI, that should fix it/set it correctly. If not, try that.