"Setup was unable create a new system partition" error installing Win7

  * Does it sound like a MB problem?

 

I’d say doubtful.  It sounds like you had the same problem in IDE mode (these drives work fine as IDE drives, they’re just slower), and your computer has otherwise been working fine in IDE mode.

 

  * Would creating a USB-bootable version of Windows 7 help?

 

I’m no expert on the windows installer, but I’d say probably not.  It’s just going to load the same stuff into memory regardless of the source.  I guess it’s possible something got messed up when you burned to CD-R, but I wouldn’t put much on that being the problem.  

 

Getting up to date drivers for the installer is the more important bit.  I remember had to do some gymnastics with drivers to get my non-sp1 windows to recognize my drive in AHCI mode, but they really ought to have gotten up to date drivers into SP1.  SP1 came out last year, the P35 came out way before that.