I rechecked the Koutech web site an I got the the cards mixed up. This card does need drivers. It is a RAID card. There should be a CD with it. On the Koutech site there are some frequently asked questions that address installation and drivers. It may be that the system stops during installation because it has preliminary drivers during copy to the HDD but when control is transfer to the HDD to complete the install it can't find the drivers for the controller card and stops.
http://www.koutech.com/proddetail.asp?linenumber=105
Check at bottom for FAQs
Edit:
If you don't have a floppy, I still say it would be easier to install Windows
with both drives (HDD and CD-ROM) connected to the motherboard. Since your cable isn't long enough, just let the CD-ROM be out of the case. Then you can load the controller drivers (either from the intenet or a CD) and then reconnect the CD-ROM.