Well I was having this issue with a 7.04 install. It was very frustrating and then I was at my last straw and tried a different CD drive and guess what, it works. They other drive was an older DVD drive and I am guessing the drivers didn't like it or it was defective. Being a research scientist I repeated this five times with five out of five successes. I am betting there is a defective DVD driver in the base Linux install.
Good Luck!