Your shredder may have deleted the MBR (see http://www.geocities.com/thestarman3/asm/mbr/BootToolsRefs.htm
for repair tools)
Also the disk partitions may not be recovered by your cd so they will have to be reinstated using PartitionMagic or, if you know how to use it, fdisk in c:\windows\command
Check your disk controller settings and drive types in the setup screen available before booting.
The software is unable to read/write to the drives possibly because of a drive type error or the type of interface selected for the controller in setup.
ATA33 drives have problems on ATA66 settings etc....
If your motherboard was failing it would not correctly select the drive types at boot. It would report
DRIVE C: <none>
and u would get a boot failure.
If you got as far as the setup for your recovery CD I would be surprised if the motherboard was failing.
Swap your DVD to the old Drive cable and try to boot from it. If the controller on the motherboard is bad it wont boot.
Check your cables for damage too..
Hope this helps