On a somewhat-related thread, I had this trouble with OS X DP4. I got it from a friend who (the lucky bum) can afford to be on Apple's dev program, but wasn't terribly interested in OS X (possibly, like me, after using it and realising the hype was pretty much just that, nothing much more).
The first time it installed fine in about half an hour (still pretty bad given OS 9 takes me about 8-9 minutes from start to finish). Unfortunately I hadn't read up about it properly first, and it crashed constantly, and Classic wouldn't even begin to work. Some of these things I attribute to my own "fault" (i.e. thinking I might actually be able to use a non-Apple mouse [intelliMouse explorer] or a printer or something crazy like that...), but most I can only attribute to bugs in DP4. I can only pray Apple works very hard between now and the final release, because what I've mostly heard about the beta is that little has changed in the area of stability.
Anyway, sorry, I've become sidetracked. I completely formated the drive [HFS+] I put DP4 on and went back to OS 9.0.4, luckily not losing any important documents. After going to great lengths to learn about OS X and all the problems associated with it, I felt I was ready for another shot at DP4. Unfortunately the install cd wasn't. The HFS+ partition worked and works perfectly, but now any attempt to actually boot from the UDF/OSX one (i.e. to install DP4) fails, giving me (after about 15 minutes of spinning the cd up and down) a blank blue screen and a mouse cursor.
In debug mode (achieved by enabling some check box in the installer-only startup disk app on the DP4 cd) I discovered it was a media issue - trying to load some server (CVS or something-er-rather) was failing due to a read error. Checking the cd, I found it was damaged in a very strange way, a sort of below-surface scratching around about half of it on the outer few cm's. I figured the cd must have been like that when I got it, and thought it was just a bit of bad luck, albeit somewhat unusual bad luck.
However, the story doesn't end there. Recently some of my backup cd's, containing misc docs and so forth, started to play up unexplainably. When it got to the point of crashing the whole computer when trying to read or copy files, I actually had the impulse to look at the cd, for reasons at the time unknown to me. Good to see that at least I was paying attention subconciously. Lo and behold, these same strange marks as on the OS X, on several of my own, which I *know* did not have them initially.
Is it just me, or is my Apple-supplied, stock-standard DVD-ROM eating cd's?!? Anyone have any suggestions as to what I should do about this very irregular problem, and/or have experienced this themselves? Should I send the computer back to Apple and/or the reseller I bought it from? I'd rather not do this, simply because I have nothing else to use, and cannot work (and therefore eat and sleep under shelter each night) without it. Any ideas, anyone?