I have managed to find a workaround for installation from Ubuntu 8.10
livecd:

1) Boot with "break=top" option 
2) At BusyBox prompt, execute 

echo 'options libata dma=0' >> /etc/modprobe.d/options

3) Ctrl-D, and continue install as usual

The problem was due to my CD drive, QSI SBW-242, causing occasional
system freezes, when used with UDMA/33. (Actually, forcing UDMA/25 or 16
makes the freezes occur much more often). So, adding 'options libata
force=2.00:pio4' instead, also worked for me.

-- 
Freeze at "copying files" stage of install
https://bugs.launchpad.net/bugs/253321
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