First, make sure you can get to the source files okay. This error has been reported to occur when installing from a CD that is being accessed by another process. Eject and reinsert the proper CD to eliminate this as a possibility.
As in the case of Office 2000 SR1, this error may be seen if short filenames were not specified when creating your administrative share. See this knowledge base article for more details and solutions.
Due to a bug in the Windows Installer, you may also encounter this error when installing from the web. Click here for details.