Okay...the clean computer was able to do everything you said and finally burn the iso. I put the newly burned DVD and a USB into the infected laptop and turned it on. It is already set to run from the internal optical DVD drive.
A screen came up with the xPUD logo and a language selection. I chose English and pressed enter once. It took a long time to leave this screen. It didn't ask me for any other selections (ex. where you said to select "File") - a black screen with white text came up and it started running the program (I guess).
Here is what it said - I have to type this out from a screen shot I took with my phone - here goes:
Kernel command line: noisapnp quiet initrd=/opt/media lang=en knap=us BOE=/boot/xpud
Build Date: 26 October 2009 05:15:02PM
xorg-server 2:1.6.4-2ubuntu4 (buildd@)
Before reporting problems, check http://wiki.x.org
to make sure that you have the latest version.
Markers: (--) probed, (**) from config file, (==) default setting,
(++) from command line, (ii) notice, (II) international,
(WW) warning, (EE) error, (NI) not implemented, (??) unknown.
(==) Log file: "/var/log/Xorg.0.log", Time: Tue Jul 17 10:56:32 2012
(==) Using config file: "/etc/X11/xorg.conf"
(EE) No devices detected.
Fatal server error:
no screens found
Please consult the The X.Org Foundation support
Please also check the log file at "/var/log/Xorg.0.log" for additional information.
ddxSigGiveUp: Closing log
[ 11.322421] sd 6:0:0:0: [sdb] Assuming drive cache: write through
[ 11.325381] sd 6:0:0:0: [sdb] Assuming drive cache: write through
[ 11.355459] sd 6:0:0:0: [sdb] Assuming drive cache: write through
xinit: No such file or directory (errno 2): unable to connect to X server
xinit: No such process (errno3): Server error.
xauth: (argv:1: bad display name "(none):0" in "remove" command
sh: no job control in this shell
Since it said "unable to connect to X server", I checked my wifi on the laptop and the slider had been turned to the OFF position - thought that may have effected the outcome. So I turned it back on and restarted. It ran the program again - this time I didn't press enter for English and it ran anyway. I got the same exact response. I checked the USB with the clean computer because the light on the USB came on and was flashing like it was doing something, but there was no new file on the USB.
SO - am I doing something wrong?
Thank you again for your help!