I was installing Windows Server 2008 Enterprise x64 on Monday, and the installation kept bombing out with the following error message after I entered my volume license product key:
Windows installation has encountered an error and needs to be restarted
I tried re-burning the .iso image, thinking I had a bad burn or defective media, but the install kept failing. I even went back and re-downloaded the same .iso image, but the results were the same.
I was finally able to get the install to succeed by choosing not to enter a Windows product key. Windows balks at not providing the key, but will allow you to continue the install.
After doing some research I found this post that mentions this installation problem is related to using a Technet/volume license key with a trial version of the OS.