I've seen similar problems on XP installs, usually resolved by tweaking CMOS and jumper settings ( inital boot finds CD but after formatting HD & rebooting, the CD is not detected)
I'd start by making sure the CD is set as MAster and on IDE 0 and is the primary boot device , try forcing the BIOS to detect the CD drive so you see the type rather than "Automatic" on screen.
then look at your CMOS plug and play ( try both options for detecting P&P devices)