I spoke with Chris Nelson (NI) and we finally found a solution to this problem. However, we still do not have an answer on why this happens.
For future references, if you do run into the same problem, here is what you do. Install LabVIEW 6i first. After verifying that LabVIEW 6i works, install LabVIEW 5.1.1. This is how I got mine to work.
One last thing, just in case some people still think it is a CD-ROM related problem, I am using LG CD-ROM (no idea what speed) on my new machine and I had an LG CD-RW drive on a different one. The one with the CD-RW drive installs properly but not on the CD-ROM. For those of you who had this problem before, what CD-ROM did you use?
Regards,
Shan Pin Koh