Tsaukpaetra 0 Newbie Poster

Greetings!
I have a relatively old Custom PC that was resold to me from a store that was going out of business and was used as a cash registor.

Specs:
CPU: Celeron 500MHz
L1 Cache: Present
L2 Cache: some small amount +128K -500K
Ram1: 128MB
HD1: 9GB
CD1: Generic Sony
Bios: Award Plug and play
BackupBatt: Installed
Floppy: 3.5' 1.44MB Standard
SoundCard: [Sound Blaster 16] Not Present
Keyboard: Standard US
Mouse: Optional
PCI_Slots: Detected 3
AGP_Slots: Detected 1
ISA_Slots: Detected 4
PCI3: Attatched Video Card
Com1: Serial1
Com2: Serial2
IR: Not Attatched
CPU_Fan: Present and functional
SYSTEM_Fan: Present and functional
Specs_End:

Ok.

Here is the problem:
As you can tell by the title this PC suffers from random crashes, yet up until the last attempts to fix it, the floppy drive worked.

This is the story:
Purchased it for price and needs.
Upon startup, searched for any required drivers or interesting programs. Found none. System State OK.
Reformatted the HD. System state OK.
Begin Windows XP Setup. Setup Loads required files, and crashed during "Windows is starting...". Error Message says the system is NOT ACPI (or whatever) Complient. Restart setup and press F7 during Prompt: "Press F6 to install third party SCSI Drivers...". Stage 1 of setup complete. System Reboots. Start GUI Part of setup. Setup Crashed upon first dialog box encountered (Regional and Language options) during attempts to change language to English US. Manually turn off and reboot, skipping that screen. GUI Setup Complete. System Reboots. System State Unstable.
Description in the current state: Crashes randomly according to (some) of these actions:
- Mouse is moved to rapidly or too much
- more than one dialog box or window is opened.
- Random during logon proccess.
- Automatic instalation of devices

Retry OS Install: Linux
Linux Init fails consistantly during a normal phase of devices detection. Cannot continue.

Retry OS Install: Windows 98
Fails on ACPI init, so must be disabled.
Crash conditions similair to above.

Run MemTest86+:
No Tests fail. All Tests are run. Run for two days.
Observations: Each Test seems to slow down and speed up at near constant random intervals, but the test does not fail. ??? No Crashes. System State OK.

Removed Backup Battery AND set ClearCMOS Jumper on motherboard.
Bios Reset, needs to set correct time. !Floppy Disk Drive Fail(40)

That's the story.
As far as I know, there wasn't a problem with the old OS (Maybe?) but I could be wrong, I have been before.
This complete baffels me to no end. This PC was meant for small Kids' games, but it doesn't even work!
Any insight on what I'm doing wrong is helpful.
Thanks.