you could try copying all the files from the cd onto a seperate partition (you would need to make a small partition for this purpose, then try running the setup from there, but whenever i have had this problem it has turned out to be a cd/cdrom problem.
check the cd is clean and doesnt have any sticky finger marks on.
the problem could also be the cdrom drive, maybe the cableing was disturbed when you were fitting the new hard drive, maybe you have set the jumper on the new hard drive incorrectly.... only way is to open the pc again and check the cables/jumper settings. (jumpers are on the rear of the drive), if they share a cable (HD/Cdrom then the hard drive should be master (middle connector on cable), cdrom as slave (end connector).
then try to run setup again, you might be best to format the old installation to clear any corrupt files.
maybe it might be time to upgrade the cdrom to a dvd writer, prices are pretty cheap now.