Seems that the CD drive could not read the disk. Loaded into old laptop CD drive and copied to temp folder on external hard drive.
Then used external harddrive with new laptop to install Office. Worked first time.
Found tips available on MS site http://support.microsoft.com/kb/924619/en-gb.
Used "Method 3, option 2"
Next step is to find out why the opto-drive on the new laptop doesn't work properly.
Drive worked fine on a photo/video DVD, but had to use same method to install another programme from CD (Family Historian 2003).