Flashing red and white screen with cscript.exe saying "Installing applications"

I was reinstalling Windows on a machine I suspected of having a Virus and after deleting the C partition, re-creating it, formatting it thoroughly and then installing Windows, when it had finished just about every bit of installing, a Window opened labeled Windows\system32\cscript.exe and then a huge red and white rectangle with the words "Installing applications ...  Please wait up to 30 minutes for the installation to complete. The red bar across the top of the rectangle flashes to orange and changes back red and the text changes to Please do not touch any keys while the installation is in progress." As the time passes, new names of files appear on the window behind the rectangle. I can only see the text at the top, now it says Windows\system32\cmd.exe

Ok, I have installed Win XP many times and I have never seen anything like that before. Granted this is a slightly newer version of Win XP Media Center, but I've installed Media Center before three or four times and have never seen this. But since I deleted the C partition and recreated it, there should be no chance for a Virus to still be anywhere, right?

So my main question, is this a virus'd/bugged CD (even though it's original from Microsoft)? I won't attach this system to the network or to any USB drives until I hear from someone that this is right, cause this is looking nuts. But I have no idea how this could be happening. There it a utility partition on the hard drive, should I delete that as well? There's also a small amount of unpartitioned space.

How do I guarantee that there are no viruses, and maybe I'll use a diff CD this time to see if it does the same thing on instal. But I would love for anyone to explain to me what's going on.

Rick