If the OS X install DVD won't install, while the installer is still displayed on your screen, go to the tools/utilities menu and launch Disk Utility. From there, check to see if the drive is at least mounted. If it is, check to see if it's reporting any data on it (click on it and look at summary info). If it is, check the partition information for anything fishy. Then try a 'verify disk'. If any errors come up, try 'repair disk'.
If the verify and repair fail, thank yourself for having made a backup of that drive at least 24 hours ago *cough*, and try formatting it. If the formatting goes ok, then quit Disk Utility and try the OS X installer again.