I'm going to copy and paste something I put on the Sims II site tech forums. For some reason I'm not expecting a solution there...
I've tried everything to get my sims to install, Holiday edition, full one not the pack. It has worked on this computer before a reformat. First the current problem, then I will tell you what I have tried.
I have copied all of my cds into folders, with the main one named "Disk Images" and four folders named "Disk 1", "Disk 2" etc. (Without the quotes) My instructions say to click on Setup.exe icon, but I don't have one, I only have AutoRun.exe in my Disk 1 folder. When I click on that, the first disk installs, but then I get "Insert disk 2", and clicking on "Okay" does nothing.
The problem I've been hitting is on disk 2, not reading at all. But I know it can, because if I roll back my drivers, or update them, it reads that disk but not disk 3. I have an Nvidia GeForce FX 5200 card, and the reason I even thought about changing the drivers is because I've had issues with their driver versions not working with certian games. Sim City 4 had to have a really old driver to play. I downloaded the two latest drivers and two older ones that I know have worked with The Sims on this computer with no hardware changes since.
I have all my windows updates, including SP2. I have Direct X 9.0c, my motherboard is updated as well and current sound drivers. I have a 2g AMD processor, 1g ram, and the video card above. Not totally top of the line, but fully compatible and my game (when installed) runs smoothly with all video options at their highest. I've never had a problem installing before.
I defragment, clean temp files, and run scan disk between each attempt. There is plenty of room on my 120g hard drive.
I have renamed my install shield to InstallShieldOld.
I am logged in as Admin.
I have installed the SafeDisk update.
I have changed DMA transfer mode to PIO mode (because I am on Win XP).
No spyware, I checked.
And that would be the full list of issue resolutions that I've found, the last reccomendation being the copying of disks to folders.
I'm seriously stressed and in bad need of a Sims fix, please help.