It might depend on how you "created a bootable Windows 7". Wouldn't it better to use the restore media you made when you started using the system?
I googled your error and found http://www.tomshardware.com/forum/20302-63-error-0x80070002-making-clean-install-windows suggesting it could be a RAM issue.
Indeed, if a clean install fails it commonly is a hardware issue. And it doesn't seem to be the disk.
I have an Acer Aspire X3400 with Windows 7 64bits that I bought last year (2011).
One week ago it started going really slow, so I scanned for a Virus but there was nothing. Then when I opened a session the computer would freeze. I could not even access the hard drive on the network.
I created a new session thinking that it was corrupted. But same thing I would open the session and it would freeze.
I rang up Acer, they tried re-boothing (Alt Gr + F10), re-installing. Nothing would work. They suggested it might be the hard drive. As I am not longer under guaranty I would have to pay for repairs.
I thought that if it was just the hardrive I could change it myself. I bought an identical hardrive to the one already in there. (Western Digital WD10EARS 1t 3,5 SataIII).
I also created a bootable Windows 7 (as I have the product key) to re-install.
I tried booting the computer. the installation started but froze at the decompression stage 0% and then appeared error 0X80070002.
I tried again and windows boot manager appeared with error 0XC00000C9 .
I don't know what to do now. Any ideas?
Thank you !