Sounds like you are using the most recent drivers for WinXP and this printer. If the scanning driver is getting stuck then perhaps you have not completly cleaned up all of the files necessary for a good install. Many times the imaging services from HP leave shrapnel behind after performing an uninstall that can interfere with the next installation attempt.
Try this approach:
1. Uninstall all HP software from Add/Remove programs
2. Delete the C:\program files\HP and C:\program files\Hewlett Packard folders
3. Search the installation files for any Scrubber utilities. These can normally be found under the root\util\ccc or root\Utilities folders.
4. Remove any drivers installed under Server Properties from the Printers and Faxes window.
5. Reboot
6. Run the installation wizard from HP located in the installation files you downloaded from HP
7. Do not plug in the printer until instructed to do so by the installation wizard
If you get stuck at the part where the devices are getting installed:
8. Open Device Manager
9. Search for any unrecognized devices
10. Right click and select upgrade driver
11. Point the Hardware Wizard to the installation folder
If all the devices are installed in Device Manager and the wizard still does not finish:
12. Search for the installation log
13. Should be somewhere like C:\Documents and Users\userId\AppData\Temp
14. Organize the temp folder by date and search for any HPxxxx.log files
15. Review the log to find where the install errored and post it for us to review
Hopefully this process will demonstrate that an install usually fails in 2 critical areas. The first is the installation of the devices in Device Manager. The second is the registration and installation of the software. Pending on where you get stuck you have to focus your attention in one place or the other.