this has virtually been an ongoing problem for a very long time now and no research i've ever done into this has ever come up with a reasonable solution or a solution that works. here's an example of an instance of .cab files screwing me up the cornhole: installing farcry... get to the 3rd cd... corrupt .cab file, you are screwed, byebye. this happens with two of my hard-drives, one from wd and another maxtor. seriously now, what the hell causes .cab files to just freak out? it makes no sense at all. my cds are not scratched, my hdd's are fine. blah. funny thing is that i've had farcry installed beforehand previously.
I have no idea what makes .cab files freak out, but I have a gut feeling that it is a combination of the outdated compression algorithm they tend to use and flakey CD drives. I've come across this in the past, where Office wouldn't install on some systems due to 'corrupted' .cab files. The way I got around it was to copy the entire contents of the CD to an "Install Temp" directory on the HDD and install it from there. It's faster than installing from CD anyway, and it eliminates the CD-ROM variable. When you actually play the game, the game disc should still work fine as the game wants to see the copy protection, not the .cab files.