I suggest a more focused approach here. Let's just look at the 003 and ignore the Eleven rack for the moment. Starting with a clean system and uninstall Pro Tools with the uninstaller on the pT8 disk or start with a fresh load of Windows. Before anything else goes in, check Device Manager for yellow exclamations and make sure everything is updated and working. Then I would start with the 003 plugged in but powered OFF. Then install iTunes/Quicktime(you NEED QT so you might as well install the package) and the latest PACE drivers. Also, download the 8.0.5 update and unzip it to the desktop. Now run the PT8 installer, but DON'T power up the 003 when asked(just click OK and let it finish. Reboot and run the 8.0.5 update, and DO power ON the 003 when asked. Crossing your fingers won't hurt. If this still doesn't work, I would do 1 of 2 things; post a Sandra report for the computer in question, and/or contact a local Avid dealer or rep and maybe try to get some local support. BTW, your friend's description of how easy it was to get his Steinberg rig going, is exactly how my PT8 setup went
