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Even though the CD worked in one computer, doesn't necessarily mean it will work in yours. I've found that making a copy of the CD is sometimes enough to "smooth out" any imperfections in the CD.
Also, it is possible that there is something wrong with one of the blocks on your HD. I'd recomend using Apple's Disk Utility and choosing whatever kind of "surface scan" they offer--sorry, my memory of Macs is getting a little foggy so I don't remember the exact options.
--Rob
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