What OS is installed?
After the screen shown, what happens?
Make sure your using the PS2 port and not adapter to usb, then -unplug- everything (thats ALL connected devices) from the USB ports...
Then try it again. If it works, try it again with just the mouse added!
If still no luck, the keyboard or its cord, or the PS2 port might be toast, try another keyboard (or get a $10 usb one)