MacBook Pro 2008 stuck in OS X Mavericks installation
The installer fails to bless the system folder (EG make the drive bootable). This could be an issue with boot sectors or other parts of the disk having a problem of some sort.

Thorbjørn's idea for formatting the HD might indeed work as that will rewrite parts of the disk structure and (hopefully) the part that is failing. Zapping PRAM (COMMANDOPTIONPR at startup) might also help.

Failing that you may have a disk error that is beyond the capability of Apple's Disk Utility to fix. Diskwarrior or other disk repair tool might be something to try next.