The system connot read from the specified device.

Have you tried to clean the cd? Can you right click on the cd and choose "explore"? If you can explore the contents, have you tried to copy all of the contents from the cd and then copy them to a newly created folder on your desktop and them try to run the setup from there?

I, too, have a Dell Inspiron laptop, and the CD/DVD drive is *by far* its weakest component. Some applications seem to be unable to access it properly, sometimes I have to open it and turn the media around a couple of times before it works.

If neither this method nor the one given by GTPD22 will work, try this:
- download and install the free Imgburn: www.imgburn.com
- use it to write a disk image
- mount the disk image in either Daemon tools: www.daemon-tools.cc or MS Virtual CD: http://download.microsoft.com/download/7/b/6/7b6abd84-7841-4978-96f5-bd58df02efa2/winxpvirtualcdcontrolpanel_21.exe
- then install from the virtual CD drive

Imgburn should be quite capable of handling problematic CD drives. If this method works, you could use it for all apparently inaccessible media in the future.

My thanks to those who responded.  Having limited time to resolve this issue led me to http://support.microsoft.com where I found a simplistic, well-written solution at its knowledgebase article Q314060.  The solution required editing the registry and deleting two entries and rebooting the system.  Worked very well!