A couple of week ago my Acer Aspire 1714SMi started giving me blue
screen so I sent for service and they replaced the HD. When they
returned it to me they said that they hadn't installed the OS and
that I had to do it with the restoration CDs that came with it. I
downloaded and run "SeaTools Desktop" from Seagate (since it is a
Barracuda) to check if the new HD was ok, and the results where 100%
good.

The problem is that WHEN I USE THE RECOVERY CD TO SET UP THE LAPTOP AT
THE END OF THE INSTALLATION, I GET THE ERROR "THE SYSTEM IS NOT FULLY
INSTALLED. PLEASE RUN SETUP AGAIN", OR GET BLUE SCREEN. The SeaTools
still report that the HD is 100% good (both quick AND full test).

What gives?

Is this a BIOS communicate ? Or you see this when Windows start loading ?
In first situation its possible that you lost MBR (master boot record) , you
can use "Fdisk /mbr" command from bootable cd/floppy etc. or you will have
to reinstall system. In second it's most like the system loose some of major
files ....

look and read this carefully :
http://www.kellys-korner-xp.com/xp_sys32.htm
http://www.kellys-korner-xp.com/win_xp_rec.htm
http://www.webtree.ca/windowsxp/repa...r%20the%20Boot
%20Sector: