I would just return it. If you warranty it you are likely to get a repaired unit rather then brand new.
Your other option is to call for service and then troubleshoot with them. Sounds likely that your Harddrive has issues. If you persue this route and this is the case, make sure HP sends out restore media. The harddrives usually come blank. They often charge for this but i would insist that it be free since you never could boot the pc to make your copy.
Personally, this is one of the items I only buy locally - so that I can exchange it within an hour if its not 'right' fresh out of the box. Monitors is another one.