|Also why are you trying to install from CD?|
You should be able to use the recovery partition to revert back to factory defaults.
OEM computer manufacturers are required to provide at least one way for you to reinstall Windows - your computer should have included either a restore partition on your hard drive, or Windows install/restore disks.
The Acer Aspire One should come with a recovery partition. Check the screen at the start of booting, there may be a prompt for it. Should be ALT + F10 (but may vary by model).
Consult tech support here by feeding in your specific model details.
There is information on restoring the OS:
Try that and see if makes any difference to your fault. If it is hardware fault it won't. However, you never know.
☺ When everything else fails, read the instructions.