If the CD itself seems good (when copied from another computer), my only guess left would be the CD-ROM drive. Open the case and make sure the cables connections (both cable and data) are not loose. Consider using a different cable. If all else fails, try using a different CD-ROM drive (for example swap it from another computer). A visual guide here:
http://www.fonerbooks.com/r_cd.htm
In the pics it's not clear, but I think they're using a 40-wire cable. If you can use an 80-wire or a round cable that would be better. Here's pics for illustration
http://www.mikeshardware.com/pics/ide8040pin.jpg round cable:
http://www.modsynergy.com/Modsynergy...s/Memorex8.jpg
As always, before opening the computer case, be sure to turn everything off, and discharge yourself from static by touching the back of the case. Even a small spark could destroy internal components.