Even though Reenie managed to get this game installed, I thought that I would explain a little about what was going on with this installer. If you look at the CD from the attached image you can see that the installer is a very large (600 MB) single file installer. Depending on what installer system they used, there are several things that need to happen before you will see the GUI of the installer. If is just a self extracting EXE that will start the installer after extraction, it will probably just extract to the temp folder then run. This is not that common anymore. It is more likely that it is a single file installer, which may first copy itself to the temp folder then if it is compressed as a solid archive, be expanded before the installer initializes. Add to this any integrity checking that the installer may do on launch and any scanning that Windows and/or security software may do. I suppose that it is possible for something to time out if any of these things take too long.
It is common for such large installers to appear that they are hung. I have had this happen to some of my installers. Often just waiting long enough is enough, but the delay is a design consideration when writing an installer and needs to be weighed against other factors. Solid compression can make for a considerably smaller package, but exacerbate the slow initialization. This was a factor in my SQ2VGA installer. It was 472 MB, but I needed to also keep the download size as small as possible.
Copying the installer to the hard drive first helped because to took the slowness of the optical drive out of the equation. It also confirmed that there was no read or CRC errors as you would not be able copy it if so. Additionally it would seem faster since it is no longer being copied from the disc. It may still copy itself to the temp folder, but at hard drive speeds.
One last note, the desktop.ini is just something that is in the CD Burn Area that shows on the disc if the Windows built-in burning abilities is enabled. Not all burning software disables this. You will also see any files that are accidentally dropped on the drive. These can be safely ignored if not intentional.