My 7320gz freezes and screen garbles. Sometimes during boot, other times an hour into a session. Is this a HDD issue?

This is a sign of memory issues with your Mac. Replacing the memory should not be very expensive.

Well, first of all XP is not the latest supported operating system from Microsoft.

That being said, I have not had a garbled screen followed by an error message 'setup didn't find any hard disk drive installed' on a laptop, in my limited experience with laptops (i.e. Acer One, Acer Aspire, Sony Vaio, etc.)

If you have an unexpected garbled screen it points to the pc board or mother board or the video card, but more likely the motherboard.

And, if you couple this with the hard disk drive not being detected, it reminds me of a situation where I had a no hard disk drive detected on a SCSI drive connected to my Windows 95 computer in the 1990s when I had heat related issues with the circuitry on the hard drive getting burnt out capacitors.

If the drive is not recognized, it might mean the boot sector is wiped, and essentially it needs to be reformatted and the operating system needs to be reinstalled (which you evidently tried to do).

To my memory, I never had this problem on Windows XP with a laptop, so I am thinking it's not Windows that is at fault, but the physical hardware is giving you problems.

If you boot from the CD for Windows XP and it doesn't find the drive, it's a big problem for this laptop.

I wish you luck in finding an answer to that one, seeing that it's out of warranty and XP is no longer supported by Microsoft.com.

sounds like the hard disk drive is slow to spin up. Sometimes older drives don't get all the way up to speed at boot, then with repeated restarts, the drive warms a bit and the spindle friction drops allowing full speed on the drive.
Try running HDD Diags the 1st boot of the day Fn +power button, see if you get any diag failure. Generally, a drive has to be within 3% of rated drive RPM (5400 or 7200) to function

I had a similar problem before mine completely crashed. Make sure you back up your data and have a look at the space you have left on each of your three partitions. Try to delete any unused track space before recording again.

No, not a faulty CPU, a faulty motherboard.

This is very possibly a hardware problem, namely a crack in the motherboard. Sorry, no easy or cheap fix for it if that's the case.

From experince I would still say this is a heat issue, I just went though this with my HD4870 ATI card. I was using an after market cooler wich was insuficent for cooling. All the symptoms point to a heat issue. Also since the card is 2 years old, its a good chance the VRM's have fried and any heat causes the card to basicaly shutdown in a manner of speaking. you could try getting the Accelero S1 cooler that would replace the fan on the card, then attach 2X120mm fans. Only problem is you can buy a newer better card. for example the 8600 GT is about 80-90$
http://ncix.com/products/index.php?sku=35559&vpn=EN8600GT%20SILENT%2FHTDP%2F512M&manufacture=ASUS

update monitor driver
your screen may be going
how old is the system

how long does the post takes it to finish before it goes to boot? are there external device connected to your computer like a printer or external hard drive or flush drive? try updating your bios and motherboard chipset.

Try this:

Boot the system with your Windows XP installation disk. When the boot options window appears select R for recovery console. Once you have logged into the DOS session type: fixmbr and hit the enter or return key and select "y" for yes you want to do this. Type: fixboot and hit the return key again, hit "y" for yes.