Are you shutting down all non-essential programs (especially anti-virus) before trying to install the game? I've had an anti-virus program cause the same symptoms (very slow install, then an error) installing software.
Did you check the CDs for dust, scratches or fingerprints, which could be causing a problem? (though that probably wouldn't account for the slow install)
Try copying the files off both CDs into the same folder on your hard drive, and install the game from there. If the files copy ok then there is probably not a physical problem with the disks, and you will avoid any issues with the optical drive during the install.