Installing the software sucessfully and the ability to actually play a BD disc are two separate issues. You should be able to at least install the software even if your system does not pass the check.
What OS are you using? I think for XP you need at least SP2 and for Vista, SP1 would be your best bet. Make sure you OS is up-to-date with all hotfixes.
You also need administrator privileges.
At what point during the install does the error appear? Can you deselect PowerDVD from the install options and install the other programs without error?
Try copying the CD to your hard disk and run the setup from there.