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Sounds like a problem with the Mac HD .
Can you also please make sure that the Mac OS DVD is very clean any marks will affect install .
Ok , First step :
A safe boot can also help ,Turn off the Mac .Power on the Mac .Hold shift on the keyboard using a USB keyboard , while powering on the Mac and booting , boot to safe mode.Once booted to safe mode , restart and boot as normal .Full details here :-http://support.apple.com/kb/ht1455
After this is completed we should check the Mac HD with some disk tools .
Also if your updating the OS from apple menu , software update . .. Dont .
Please use a combo updater instead .
If you already run leopard . Please use this link to download an updater .
But before installing , please check the Mac HD . as below .
Lets run though some basic repair checks .Repair Mac HD , Check Permissions with the OSX Startup volume.To check for disk errors and possibly fix issues with the Mac HD volume and other Partitions .Please run a Mac HD drive repair ,and Repair Permissions of the Mac HD startup volume .Review this video to become familiar with the below procedure .. http://www.youtube.com/watch?v=MFv3h7MVX4A&feature=relatedDisk Utility1 Start from your Mac OS X Install disc: Insert the installation disc, then restart the computer while holding the C key.2 When your computer finishes starting up from the disc, choose Disk Utility from the Installer menu.(In Mac OS X 10.4 or later, you must select your language first.)?Important:- Do not click Continue in the first screen of the Installer.If you do, you must restart from the disc again to access Disk Utility.3 Click the First Aid tab.4 Click the disclosure triangle to the left of the hard drive icon to display the names of your hard disk volumes and partitions.5 Choose your Mac OS X volume.6 Click Repair. Disk Utility checks and repairs the disk.If errors are found please run the check twice .Report any errors in displayed RED to me .Tip:- Always start up your computer from an Install or Restore disc when using Disk Utility to verify or repair your startup volume.**Perform Disk permission repairs while Booted to your Mac HD as normal**.Please run repairs on all your Mac HD partitions and disks.Choose in turn the drive name from the left hand list , and use repair .Run repairs twice if RED errors where found , check to see if they are now cleared.Using the Repair Privileges UtilityFor Mac OS X 10.2 or later, open Disk Utility found in the Applications/Utilities folder.Select your Mac OS X startup volume in the column on the left of the Disk Utility window, then click the First Aid tab.Click the Repair Disk Permissions button.Please wait while the Mac HD is checked.If errors are found please run the check twice .Report any errors displayed in RED to me .-Permissions DefinedMac OS X incorporates a subsystem based on a UNIX-style operating system that uses permissions in the file system.Every file and folder on your hard disk has an associated set of permissions that determines who can read, write to, or execute it.-Next up system maintenance:Please try using ONYX to repair clean and check all OSX caches , font caches and other maintenance scripts .http://www.titanium.free.fr/download.php?sid=6f63238cb23c94b2fcb384373b97b83eAbout OnyXA multifunction utility for Mac OS X.It allows you to verify the Startup Disk and the structure of its System files, to run misc tasks of system maintenance, to configure the hidden parameters of the Finder, Dock and of some of Apple’s own applications, to delete caches, to remove a certain number of files and folders that may become cumbersome and more. We can also check the SMART status of the HD with OnyX .Extra tools:-Also its best to get a full disk repair tool for future use :-Drive genius may have prevent this problem as it seems your Mac HD had an error that needed to be fixed , Apple disk utilities is a basic application not intended for major disk error repairs or testing :-http://www.prosofteng.com/products/drive_genius.php?PHPSESSID=d0291636841b25cf082e211e2d6def53or drive 10 for OSX depending on OSX version .-Now run some tests with your software and see if there's a difference ?
If the Mac HD is error free , please try installing the update .
Does this help .