I have a 80GB partition.
First partition is 20 GB, and I am installing windows me on it. There's
also a second partition of 20 GB (FAT32, no data on it) + the rest of the drive is free (not formatted yet). I did install correctly the CD ROM driver, and the system detects the CDROM drive (from DOS) with no problem. I access the CDROM drive, launch the win ME install, and everything goes fine..but as soon as win ME installation process has to reboot the PC, it cannot access back the CDROM and continue the install. Instead, it boots to the CD ROM drive dos promt, and says that I should go the the win ME install
CDROM WIN9X directory and type 'oemsetup.exe ' in order to continue with install. But if I do that, I get a msg telling me to go back to the CDROM install prompt and type setup.exe...and it turns in circle! AUTOEXEC.BAT and CONFIG.SYS have correct settings for the CDROM. And even if I activate BOOT UP WITH CDROM (from BIOS settings), I am still back to same problem.
I have a windows ME startup/rescue disktette that let me do same stuff with CDROM support, but is brings me to same results!

try using copy
make a win9x folder on your c: drive
at c:md\win9x press enter
then a c:cd\win9x press enter
then at c:win9x copy g:\win9x (where g: is cd-rom)
then after copy completes
type setup press enter.

should read
then at c:cd\win9x press enter
then at c:win9x copy g:\win9x (where g: is cd-rom)
then after copy completes
type setup press enter.
this will install windows from the harddrive
from c:\win9x

Look at the box if it is not an upgrade.
If that doesn't work try installing windows 98 and than put windows ME