If I cast my mind back (what's left of it), I recall an error which used to occur if service pack 3 was installed. Pinnacle issued a small fix but your chances of getting that now are remote. However I do not think that is your problem.
Code 0x80070017 does not give a specific error. To get an idea of what it means you need to google it and compare it with the problems that other people have had. Almost without exception it has concerned the installation of an OS. If there is anything common with your problem it is that some had the error when unpacking the Windows files prior to installation. This is similar to you getting the error soon after trying to install. I suggest you google the error but keep what has just been said in mind.
For starters, I suggest making sure the installation disc is clean and free from scratches. If you have children, be sure to remove all signs of jam, chocolate and ice cream. Beach sand in particular does not agree with rotating discs.
Copy the disc to a hard drive and try installing from there.