Morrowind - Installation Error - Advice?

Hi people... I'm unsure as to whether this is the right place to ask or not, but it's definitely worth a try!
I just purchased Morrowind and I'm attempting to install it, but keep getting an error which informs me that;
"An installation file could not be installed to my drive - Catastrophic Failure"
Uhm... wtf? heh
If anyone has any advice, or had this problem and worked a way around it, please let me know...

Currently, I'm running a Duron 700, 128meg RAM, GEforce2 32meg video card, 20gig western digital 7200rpm HD (PLENTY of space to install the game), and a Kodak 12speed cd-rom (i also tried it with a 14speed mitsubishi cd-rom) - Windows ME operating system.

I have never had trouble installing other games and the computer is a little :cough: out of date, but it runs flawlessly other than this problem.

As a test, I had a friend use the SAME CD to install it on his computer, but there were no problems. I don't understand!