Is this a 'clean' install? or are you installing over the top of a previous one?
If its a reinstall over an existing copy, backup whatever you think is necessary (config, scenery whatever) and then just delete the C:\program files\microsoft games\flight simulator 9 directory and do a 'clean' install. It may be that as the installer goes to read/write the file, your antivirus may be 'scanning' it and locking access to it just long enough to screw with the installer.
If its a clean install then either:
a. Your CD/DVD drive lens is dirty (and/or dying).
or
b. There may be bad sectors on your harddrive causing it to fail when it tries to write data.
If the install is consistently halting at the same place each time you try, then it is most likely reason 'a'. Get a lens cleaner or a new CD/DVD drive. If it is failing in a different spot with a different file... then again it could be either.
If cleaning/replacing the CD/DVD drive does not help, Try running scandisk:
open up My Computer

right click C:, select properties

Tools

Check Now...

Tick both boxes

click start

It should ask you if you want to schedule a disk check the next time you restart. Click Yes.

restart your machine.
During startup process you should get a lovely pale blue screen (not BSOD) showing you the status of the scandisk. The check for bad sectors will take a while... so be patient.
If it finds any bad sectors, my advice is to replace the HDD as soon as possible... once bad sectors start popping up, the drive will become very unreliable and you're putting data at risk.