Incredibly poor performance when installing software (HDD problem?)

The computer was super slow (slower than any Mac I've ever owned) when installing software. The hard drive seemed to just space out (time out). Activity Monitor showed zero or little activity while installing apps from a DVD.
So I decided to format the HDD and reinstall everything.
I finished reinstallign the OS, and now I am using the DVD labeled "Bundled Applications" to install iLife and it's been over one hour and it has only progressed about 25%. The setup assistant says that the estimated time will be one hour and 44 minutes!!!
I changed the Power Options to not turn off the hard drive whenever possible, just in case, but it just doesn't seem to be doing anything at all (same problem that made me want to format and reinstall from scratch).
Why is this so slow? Anybody?
Thanks in advance.
Message was edited by: Alexkywalker
Message was edited by: Alexkywalker

Here's some more useful information that I should have mentioned: I have 2 external hard drives attached to the computer via USB and FireWire 800.
Before installing I ejected the hard drives but did NOT unplug them.
I noticed that while installing some other software the Apple Installer which is used by all installations (aka Setup Assistant) automatically re-mounted the hard drives I ejected, so I unplugged them and the installation process sped up to normal.
So I think this is an issue with the Apple Installer searching for information in all drives connected to the machine.
I will try again tonight with the Bundled Software and see.

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