Thanks for the links. Looked at the DVD that I was using, and was embarrassed to see that it was 4 years old although in its sealed package. Of course no SP1 etc. Before trying to update the Sata drivers separately, decided to download a recent iso - [URL] - and then try and install it. Went like a charm, with no problems whatsoever.
Trying to do a fresh install of Windows 7 pro on a Optiplex 380. The installation on a new WD 500 sata hd hangs. The pc was purchased from Dell and came with Win XP installed, and Win 7 DVD. The only change from the original configuration was to install a Radeon HD 4650 graphics card. While it does have some flaky usb ports in the rear, it otherwise works perfectly fine in XP. Latest bios uopdated. Nothing other than usb keyboard, usb mouse, video cable dvi, and network cable attached. A web search shows a wild range of suggestions - remove this, disable that, turn on AHCI in bios<  
Windows 7 installation hangs at Completing installation on Optiplex 380