I would suggest you try doing things through the command line. to open a terminal is gnome, I find it easiest to right click on any unused spot on the desktop, and select open terminal. When the box opens, try:
If you have a cd in the cdrom, it should list the contents of the disk. If there is some error, report it here and we'll get you through it. If you get to /mnt/cdrom, the next command can be:
which will give a readout of the top level of the cdrom. You need to navigate to where the rpm that you are trying to install is at. Once there, you will probably need to su up to root, then you can install the package with:
<you>@<yourbox>#rpm -i whatever_the_hell_you're_installing.rpm
and that should be that.
Looking more closely at your post, you may have an issue with the drive itself. There really should never be a problem reading off a cdrom, and the fact that you had problem installing suggests that your problem isn't with the OS, but with the oldest enemy of man, dirt! A cheap cleaning CD may solve your problems.
Please post back with any problems that you encounter.