Turn OS Install Mode OFF ... it limits the system to 256MB of RAM, which is insufficient to install 2008R2. What storage controller do you have, or are the disks connected directly to the motherboard?  Do you have the option during POST to boot to a CERC CTRL-A utility? Is your power/status light blue/green or amber/red? How much memory do you have installed?  How many DIMM's? I would remove any expansion cards or other external devices (except mouse/keyboard).
I have tried installing Windows Server 2008 R2 three-4 times today. I keep getting a blue screen after the boot disc gets to "Loading Windows" part. The code is 0x00000f4 (0x0000000000000003 , 0xFFFFFA8000925060 , 0xFFFFFA8000925340, 0xFFFFF8000C784DB0) Please remember I am trying to install it on a blank 250GB sata hard drive. I do have two hard drives plugged in, but I was going to use windows server raid it for me. My next step is put that hard drive in my normal pc, and try to install Windows Server 2008 R2 on it that way. But I do not know if it has to do with the server or the hard drive or the disc. The Bios boots fine, and I have put it in "OS Install mode." Please help if you can!
Dell Power Edge 1800 - Can't install Windows Server 2008 R2