Ok so I upgraded the power supply from the OCZ 500w to a Corsair 750w and it made no difference atall.
Out of curiousity I left the computer on the frozen startup screen for a while a couple of times, I then noticed that after a while I would get a BSOD with the error 'atikmdag.sys' which it seems is the issue. Upon some online research of this, I found out it was quite a popular problem and saw various solutions which work for a handfull but not the rest.
So anyway theres nothing much more I can do and i've had enough with it now, so I went back to using nVidia cards and ordered a GTX260 last night which came this morning and has been working flawlessly so far, I finally have this new machine completed! Only problem is it doesn't have HDMI output, so i have to use an DVI->HDMI adapter and use the jack on the mainboard for audio, but hey, not to bothered.
Thanks for your help though guys!