Binos,
That's very strange. Sounds like you need
Stuffit Expander, although in my experience, just double-clicking on the install application should be enough. If I recall correctly, you need to remove the Office "Test Drive" that was pre-installed on your iMac with the "Remove Test Drive" application on your Hard Disk. Put the Office CD in and click on the "Microsoft Office 2004" icon. It should then be a question of following the straightforward onscreen prompts.