Usually if getting from torrent, won't need to bother md5 sum either. It automatically make sure it is complete and no error.
That's what I do, too. Torrents are far more convenient, even if the downstream is a bit slower than a given http connection. There are quite a few more benefits than just checking for errors, too, like downloading multiple files at once, choosing priorities, capping speeds, choosing which files to download, and distributing the bandwidth among the peers instead of killing a single server.
Download your disk image with bittorrent next time to save the trouble, like sdcat mentioned. It could also (in rarer circumstances) be a problem with the optical drive itself. I've seen this problem before a couple times.
In any case, it doesn't sound like a software issue (as far as programming is concerned). There's something either malfunctioning, corrupt, or insufficient. Don't forget that running an entire OS off a CD takes a considerable amount of memory.. much more than running it off the HDD because it has to load all the files into the RAM. This includes files you create inside the OS, too.. ie, downloading files off the internet while in a LiveCD.
Ubuntu has a new feature that'll let you install alongside a Windows partition.. I think it uses a virtual hard disk file or something, like an emulator would do, except it boots the kernel and mounts the file as if it were a real disk. Sounds like it should be every bit as fast as a normal installation. I'd try that.