i copied sp2 from cd on hdd then try to install it but no use.
actually sp2 installation extract the i386 files in memory and then installs files one by one.
so i don't think there is any prob with CD ROM.
Problem must be with ur CD rom...Might be when u copied ur cd to ur PC, some file didnt copy properly...and SP2 installation doesnt extract files in memory(RAM)...it extracts on a hard disk partition having enough free disk space..
Better Download the setup from Microsoft website