I was doing tech support for a friend this weekend. He was paving an old HP Envy laptop (although this happens on some Dell Inspirons as well) and was getting a blue screen in the middle of install. Then, of course, if you're not looking at it you'll just reboot and drop back into setup and get the "the computer restarted unexpectedly or encountered an unexpected error." At this point he was in a setup loop.
"HIDCLASS.SYS" is the driver that failed. HID means Human Interface Device, and that means "keyboards or mice" for the most part.
Errors in HIDCLASS.SYS, especially during setup, almost always means that there's trouble with an attached keyboard or attached mouse. I asked my buddy if he had a mouse attached and he did. He removed the mouse, and started setup over again. Setup succeeded. Then, he spent about an hour (and several reboots) getting Windows 7 "gold" (which was released in July of 2009, almost 5 years ago) up to date with patches, service pack 1, and the latest drivers. Then he was able to attach his mouse and it works fine.
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