Are there any Linux distributions out there specifically for fixing Windows related issues, or that will do diagnostics on hardware? Eg: Test the hard drive, RAM, motherboard, CPU, FSB, all that in one disk?

Finding different DISKS, and having our users run each individual test takes too long, and can easily be a waste of CD's.
Here is one to try out. It has many diagnostics and test that can be done. It also includes a lot of troubleshooting tools.

Check it out at: http://www.ultimatebootcd.com/

EDIT: Just noticed that this can also be run off of a USB Flash Drive.The problem with SUGGESTING this solution is depending on the user's level there are extremely dangerous utilities on there that can render a machine useless with one incorrect mouse-click...

You would then see a bunch of " what happened to my data" posts...i used the CD you recommended ! !The reason I suggested it is because I know that Zylstra is competent enough to use the utilities safely.I understand...that wasn't my point.I know. I was just clarifying my reasons for the suggestion. =]. I see what you're saying though.So, is Ultimate BOOT CD something that could be put into the hands of a newer computer user?
I would want them to be able to MAKE a mistake by accident, but not go about ruining things No.

I wouldn't recommend it at all until i know what their skill level is.