So here are my steps to reproduce:
Groovy Arcade Linux beta installation
1) Boot from beta-CD
2) Select 2 from the menu VGA-1 (on my system)
3) Groovy Arcade booting animation starts
4) Welcome screen appears, press Ok
5) Select 3 (HD Installation and Partition Tools)
6) Select 3 (Partition manager)
7) Do you want to stop Automount (yes)
Select topmost drive (/dev/sda 111.8GIB)
9) Three partitions are displayed sda1-sda3
10) Delete all partitions and select Write.
11) Quit Partition manager. Try to partition the drive again just to be sure, observe that there are no partitions anymore.
12) Go backward by selecting Cancel
13) Select 2 Hard Drive Installation
14) Install to disk? Select Yes
15) Do you want to setup Networking No
16) Do you want to setup Audio No
17) Do you want to setup Video Yes
18) Select 1 Monitor Type and select 1 Generic 15.7 kHz (I think this is the minimum configuration you need to do)
19) Setup /etc/X11/xorg.conf Select Yes
20) Select 8 Return to main
21) Do you want to setup System Settings Select No
22) Do you have a drive of ROMs/SNAPs Select No
23) Do you want to Auto Partition an empty drive Select Yes
24) Select topmost drive
25) Really auto-partition. Select Yes
26) Installation starts, wait until it is over. Copying Groovy Arcade Linux to /dev/sda3 drive.. is displayed while the copying is going on.
27) Installation finished, Do you want to reboot. Select Yes.
28) Really reboot. Select Yes
29) Wait until the computer reboots.
30) Remove CD as soon as BIOS screen appears.
31) Booting will halt with two lines of text. Hard to see of arcade monitor with JPAC doubling the picture. First line I can only see Copyright Peter [Something] et al. Second line I see Loading ../vmlinux/linux arcade ... failed: No such file or directory. Third line is some four letter character with blinking cursor. I might have made some mistakes in those texts, I will try to connect regular monitor to cab later.
System specs: Intel Core2Duo E7200, Radeon 6450, 1 gig memory, 120 gig hard drive and DVD-drive both in same PATA cable.
Also Live-CD seems to work otherwise. I can start AdvanceMenuPlus and select one of those free games and see it running.