I'm on my second disc now and nothing seems to work. This time I made a pristine disc image of the disc on a separate Mac before putting the disc in the MacBook. At about 70% of the way through the install on the MacBook from the CD, suddenly Parallels tells me it can't read the remaining 30% of files. So I have to quit the Install. When I try and load the Guest OS from the disc image, Parallels doesn't recognize it, even though it's sitting in living technicolor on the desktop. What I've also noticed is that these discs are nice and smooth before I put them in the MacBook. When I eject them, they have little marks on them, as if somehow the internal SuperDrive in the MacBook is scratching them. Has anyone else experienced that? This is getting expensive and a little frustrating. I still don't understand why everything else seems to recognize the disc image on the desktop except for Parallels. Sheesh... Thanks, Sean...
Sean -- I had the EXACT same problem (CDs being scratched) and returned my macbook after scratching numerous disks. The issue may have been related to the topcase as that is getting replaced as well. Sorry to bum you out, but I couldn't install anything so back it went.
