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Please run a DirectX Diagnostic:
Start menu –Run - then type Dxdiag, then select each tab across the top of the window, and run the tests on each tab. Then select “Save All Information” button in the lower right of the window. This will bring up a dialog box to allow you to select a name for the file where the information will be saved. You can save it right on the desktop as this will make it easy to find. Then copy the contents of that file from the start to the heading that says “DirectX components” then paste what you have copied into a post in this thread.
 
Drive: F:
Model: HL-DT-ST DVDRAM GSA-4040B
Driver: c:\windows\system32\drivers\cdrom.sys, 5.01.2600.1106 (Swedish), 9/16/2002 14:00:00, 47488 bytes

Drive: D:
Model: HL-DT-ST DVD-ROM GDR8161B
Driver: c:\windows\system32\drivers\cdrom.sys, 5.01.2600.1106 (Swedish), 9/16/2002 14:00:00, 47488 bytes

Drive: E:
Model: CyberDrv CW089D CD-R/RW
Driver: c:\windows\system32\drivers\cdrom.sys, 5.01.2600.1106 (Swedish), 9/16/2002 14:00:00, 47488 bytes

So do you have 3 Actual physical CD/DVD drives ?
 
So you say you get the exact same error message when you try and install the game, but he actually gets his when he tries to play, and the game installed fine.

How many physical CD/or DVD type drives do you have?
 
What publisher version are you guys running?
Their name will be on the CD.

Also rename the AVI folder to AVI_back, then try renaming the music folder to Music_back as well.
 
Thanks for the insight jdrou.
 
THat's what I get for always assuming people get latest patch first if they have a problem, Glad it got sorted for you.