To isolate the exact cause of the issue, try the following:
  • Examine the disc for physical or visible deformation or substantial scratches
  • Clean the CD-ROM with a cleaning kit or gently wipe it with a lint free cloth from the center of the CD-ROM outwards
  • Test the CD-ROM in another drive
  • Install the latest version of MDAC
  • Try copying the files to the hard disk and run the installation from the hard disk instead
  • If installing from a terminal services client, try running the installation locally instead
  • Go to the Install folder properties, add SYSTEM account, if it does not exist already, and provide FULL Control to the account
For more information about the issue, please see the following Microsoft article: http://support.microsoft.com/kb/824894