I have a very similar situation: replacing an old dell server with a new dell server (PowerEdge T310 w/xeon processor 8gb Ram, SAS 6iR internal Raid w/2 x 1TB Raid1). I would like to install Windows Server 2003 - all I have for media is the original Microsoft Select installation CDs. I can boot from the CD fine (so it is recognizing the DVD drive with no additional drivers), and Windows Server 2003 goes through the initial steps of booting (loading drivers, etc.). But it hangs on "Setup is Starting Windows". A quick Internet search reveals that Windows installations (any flavor) often hang there - and it seems to be often related to hardware issues. I imagine in my case, since it is a hardware RAID, the OS installation should just see it as a single drive and not require any special drivers, correct? Are there other hardware items that I should try to temporarily disable to help me get around this?
As to the suggestion in the reply to try the System Build and Update Utility, I tried that, but it only gives Windows Server 2008 in the list of options, and if I select that, it doesn't like the Windows Server 2003 media I give it later. Is there a different version of the SBBU that allows the use of Windows Server 2003? I note in the Getting Started manual for my PowerEdge T310 that it does list "Microsoft Windows Server 2003 R2 Standard and Enterprise (x86) Editions with SP2" in the list of supported operating systems. Unfortunately my installation CD is not R2 or SP2 - I thought I could at least update to SP2 after installation. Is this maybe part of the problem?