I've been battling this for the past two days. The manual activation only will work if you get the choice. I'm getting the "no permission - Bad Install" message so you don't get a window with the manual install selection. I gave unplugging my Internet a shot but still get the "bad install" message.
I just got off the phone with tec support. I was happy that I got a helpful person right away. After giving all my details and what I have tried (clean installs and all that numerous times) In the end I was told that this is a known problem and they are still working on it. None of the current patches or fixes applied to my issue. The one thing I was told to try in the mean time, to see if it will work, is to create a new account with admin rights and install from there. I'll give that a shot I suppose but I don't have high hopes. First I need to, once again, do a complete un-install for the 5 or 6th time.
My installs go something like this: Remove all traces of Roxio and Sonic from the HD and reg. (using reg seek) Try to install form the DVD drive and towards the end I get a message to "Insert disk:" with an OK or Cancel choice no other dialog in the box. I hit OK but I keep getting the same message. I can not install from the CD. I hit cancel and the install rolls back and uninstalls itself. I then move all files from the disk to the hard drive then I can install the program. I try to run "my dvd" and I get the activate MPEG-2 click OK and get the "no permission - bad install" box. Everything I've tried so far has not worked, I keep getting the same results. Like I say, I'm gonna try to install from another account like suggested. I just wish it did not take so long go go through this over and over again. I've wasted quite a bit of time already.