I had the same problem with mi little sisters Dell Latitude C600...
There's no floppy drive either, but it's possible to add a floppy drive instead 
of the cd drive...

I was using the ubuntu 7.04 official release...

But when I waited a few minutes it started to move pass the error and
continued the livecd... But I can tell you if the rest of the livecd
works :) it doesn't seem have enough ram to run Ubuntu from livecd,
perhaps I'll try with Xubuntu...

-- 
[feisty] installer reports I/O error dev fd0
https://bugs.launchpad.net/bugs/97306
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