Try installing from a USB drive to rule out issues with the optical drive. Here are some instructions on how to do this:
Installing Windows 7 via USB or SD Media:
Insert your removable media into a Windows XP or Vista PC (or Windows 7 PC) and run the following commands from an elevated command prompt.
2. list disk (find the disk number for the removable media)
3. select disk #
5. create partition primary
6. select partition 1
8. format fs=fat32
9. assign letter=y (or any free drive letter)
Once that is complete mount the ISO (I use VirtualCloneDrive for this purpose) or just load the Windows DVD and run the following command.
xcopy x:\*.* /s/e/f y:\
Where “x” is the drive letter of the mounted ISO or Windows DVD. Once complete boot off the device and install the OS. When a new Windows 7 or 2008 R2 build is released, simply delete the contents, rerun the xcopy command and you are ready to go again. As a note this also works for Windows Vista and Server 2008.