Mine is a copy, no issues.
I don't know what to say, in all honesty. The only suggestion I have is that it's maybe something to do with the drivers for your CD/DVD drive or the way Win7 interacts with said drive. Of course, there could be something like a ruddy great fingerprint on the disk which stops the data being read at the crucial moment.
Of course, you could somehow get another copy of photoshop (not illegal as you are using a legit serial number) and try to install that. Another option is to copy all onto a USB stick and install from there. I'm still saying it's the disk, though as it was a perfect install here.