Check the DVD for dust, fingerprints or scratches. The 'not a valid Win32 application' error is most often associated with a corrupt or incomplete download, so it would appear there may be a problem with the disk itself.
Try a different optical drive, if possible. Another drive may be better at reading the disk, or the one you tried could be starting to fail. If you bought the game at a computer store, or a game store with a demo system setup, they should be willing to check if the disk is readable there.
Also, shut down all non-essential programs (especially anti-virus) before trying to install the game. I wouldn't expect a software conflict to produce that error, but you never know.
