Who'd have thunk it!

Turns out it wasn't a software upgrade failure at all it was a hardware problem - the hard drive has failed....
The bloody thing
exactly replicated the reported problems with Micro$hite update and even let me install XP >>> Win7 twice before failing with a continual re-boot.
Finally, I tried a low-level format and it failed that.
popped in a new hard drive late last night and it has been sweet as a nut...
That's digi for you eh...?