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.
1. diskpart
2. list disk (find the disk number for the removable media)
3. select disk #
4. clean
5. create partition primary
6. select partition 1
7. active
8. format fs=fat32
9. assign letter=y (or any free drive letter)
10. exit
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.