Blue screen slow boot

My g/f macbook (13" white) HDd crashed. i replaced it with a retail Seagate Momentus XT 500GB HD.

She had long ago lost the 10.6 dvd so i downloded a copy ( on advice of apple support)

I am able to install 10.6 ... no issues

i am able to update to 10.6.8 ... no issues

It seems when i unplug and try to boot i get a blue/grey screen.

I am able to boot into safe mode ... no issues

I have booted off of usb (built with restore function of 10.6 DMG) and ran disk repair and permissons repair.

reboot laptop and still get bluew screen.

Any ideas on how i can get macbook to boot into os X?

Cheers