I have also had this problem with a new Ubuntu 8.04 final ISO downloaded
multiple times and burnt to several CD's finally installed OK using
alternate install CD. At the recommendation of some people on Ubuntu
forums tried  all_generic_ide floppy=off irqpoll kernel parameter but
still failed this was with ASrock and MSI motherboards.

The forum thread is here:
http://ubuntuforums.org/showthread.php?t=765195&page=8

This problem appears to be ongoing.

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installation hangs with SQUASHFS error zlib_fs
https://bugs.launchpad.net/bugs/85389
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