During installation after setting up my partitions, I go into the setup utility and activate the swap partition. That goes perfectly fine, but when I arrive at the target disk section it will freeze soon after starting to format the / partition.

I've tried multiple file systems and one other kernel, but it doesn't seem to change anything. One thing I noted is I checked virtual console #4 while it started to format and it seems to freeze while creating the inode tables. Sometimes it will freeze at 4/29, sometimes 7/29, and once it actually finished, but still froze.

I have no idea what's causing this, but here are the specs of the machine I'm trying to install on for reference. It's an old Compaq Presario Pentium MMX machine, all stock parts, nothing changed at this point.

200mhz Pentium I
32mb of SDRAM
4.3gb Hard Drive
2mb Video Card
24x CDROM

That freeze ... does this mean the box dies on
you without any error messages?

Cheers,
Tink

It's not a hard freeze, but the setup utility will simply not respond.

Can you check whether there's any logs/error
messages besides the console on F4?

The only thing I can think of is that DMA
bug that lived in a bunch of older pentium
chipsets ... but I would at least expect some
kind of kernel error messages.

Cheers,
Tink

Where would the error logs be stored as I haven't installed slack yet?

Never had the need to check any during install,
if there are any they'd probably live somewhere
in /var (which I hope exists during install) as a
ram-disk...

Cheers,
Tink

Well it looks like it does solid freeze, just tried to cat a log file after the lockup of the setup installation. It just sits there froze on the inode tables. And if I try to use another virtual terminal it just hangs. Any ideas?

I would guess that it's related to DMA. It may even be the cable or some BIOS setting. I think hdparm works during install. If it does try "hdparm /dev/hda" or whatever the device's name is and see. You can then disable it with "hdparm -d0 /dev/hda".
Of course, it's always possible that the harddrive is about to become a paperweight ;-p.