Yes it's likely hardware (although WinME is universally derided as the worst of the 9x/ME o/s), especially if your problems are happening during or shortly after installation (rather than after you've loaded & used a fair amount of software). Depending on the problems you're having, approach could be:-
1. If more than one memory stick, try with just one (if ok, try the other on its own). Sometimes get situation where 2 or more good sticks memory but together with motherboard they cause a problem (could also run memory test - good one here
2. If you've expansion cards (sound, modem, network etc), remove them all - does it run ok - yes, put one back in, try again etc.
3. If you've spare video card - try running with that.
4. You can usually reduce the speed of the memory and/op CPU from the bios - try this see if it improves (Bios also usually has some default 'safe' settings you can load to help stabilise hardware. Sets various things to slower values - but you'll probably not notice any loss of speed when using)
I'd also consider (when you've sorted any hardware problems) upgrading to win2k or XP - much more stable (but they're even less tolerant of hardware problems - so if you have any, need to sort them first).