I had the very same problem with my XP, first check all power connections, any slight loss of power will effect installation of driver, if this doesn't work,
use the clean program, then carry on and install as normal, at the point that it tells you to install usb cable do so and see what happens, apparently even though it seems to be hanging in fact it is serching and can't find any thing, at this point bring up the task manager by pressing ctrl,alt and delete keys at the same time. when manager is open, take out the usb cable and select restart in manager. Not quite sure about this bit, at this point scanner details should be loaded, so you can carry on and load printer by keeping the notion that you are going to use a lpt port. Once loaded relocate the port settings to usb, if you e-mail lexmark support they should give you the right way within 48 hours.
What I ended up doing was, reformatting the drive and clean install of win98, once I done this I didn't add any drivers at all, but whet stright to upgrading with XP. Then added all my driver and x73 and had no problems with it at all. Is now running like a dream had a slight glich with communication and control being knocked out a couple of times, but if this happens just take the power cord out for about a miniute and everything returns to normal, it seems to right itself, has it hasn't happened lately.
Hope this all helps, sorry abot the 2nd bit, but when lexmark e-mailed me back with the solution, I had to write it all down and have lost the instructions, thats why I ended up doing the 3rd bit which worked.