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rename the AVI folder to AVI_OLD. it's a problem with copy protection.
 
XP

I had the same problem and none of the fixes worked for me either. I am running a 1.4 GHZ T-bird with 512 RAM and my CD was an older 4 or 6x CDRW. I put in an additional CDRom (52x) that I picked up for around $30 and everything worked fine.. no renaming the AVI directory or anything.