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Who is the publisher?
 
Since Paradox does not write the installer program for that version, you would need to contact Koch Media. THey may replace your CD for you.

Have you tried to copy the whole CD to the HD and install from there.
 
No I think you have a bad disk and should try and exchamge it either where you bought it or with Koch Media the publisher. You may want to see what happens if you try to install it on another system, maybe a friend will let you try. That way you will know for sure if you have a bad disk as I suspect.

HOI 2 should be fine.