While I don't know exactly what your problem is I can suggest running the CD through a CD cleaner (on "light" mode if it has one). I've had similar problems before with different games and this has sometimes fixed it. If that doesn't work the only thing I suggest is to make sure the game and all it's files are out of the target directory and that no other programs are running. Hope this helps.

Also after cleaning the disk, delete the freelancer folder then try the reinstall.