Well, this isn't really a fix - more like a workaround. I have identical Toshiba DVD-R drives in my system. I didn't even realize until yesterday that there were separate CD and DVD versions of the game, so I don't know if that would have anything to do with the problem, but I have the CD version and am using a DVD drive, so you would think that would work fine. Anyway, the installation didn't work from either of my drives. I tried copying the contents of the CDs to my hard drive, but the copy failed on CD 2 at exactly the same point that the install failed. I tried using WinZip to create a zip file of CD 2, but that also failed at exactly the same point on the disc. Finally, I used another computer on my network to copy the contents of CD 2 to my hard drive and that finally worked. I ran the install from my hard drive and it worked fine. The computer I used to successfully copy CD 2 did have a CD-ROM drive and not a DVD drive, so I don't know if this is significant.
Let it be noted that I haven't even tried to run the game yet, so I may still encounter the loads of problems that other people seem to be running into, but I hope not! This was just what I had to go through to even get it installed. Hope this helps anyone who is having the same problem.