Hm, that does look odd. The jump cuts to the HP screen certainly don't seem to be healthy (though that's almost certainly a problem with your laptop rather than RedHat) and the mouse pointer does seem to be working. Suggestions:
- When it asks "Do you want to view the X server output?" select "Yes" and post the output here.
- When you get to the 'localhost:' prompt, log in (assuming you've set up an username and password already) and try the 'startx' command: you should get output logged to the screen (which may well end up being the same as the "X server output" it referred to)
- When logged in, look at /var/log/Xorg.0.log or /var/log/Xorg.log after a failed login attempt and post its contents here
Alternatively, and probably the best option if it's possible, is to try installing it on a different laptop - that way we can try to narrow it down to a setup issue vs. a hardware issue (in any case, it will give us a bit more information about what's going wrong, probably).
Hope this helps,