Hi,
I have recently installed 10 W2K8R2 Clients over two ESX1 4.0 update 1 systems (one server was a Fujitsu and the other one was HPDL380G5). I didn't have a problem as you have mentioned.
Please Check them:
- Check your DVD driver
- Check your installation media ( I suspect your medie even the original media from microsoft can be faulty)
- Try to transfer a konwn working .iso image to your ESXi server ( I genrally create a directory called ISOS on datastore od ESXi installetion drive and use .ISO file as CDROM image to boot.
Cheers,
K.