This Same Problem Persists in 2011
Smack in the middle of my work day, the UPS man dropped off my Snow Leopard upgrade. It was right before lunch, so I thought I would slap on the upgrade, grab a bite, and I'd have a nice upgraded Macbook Pro OS. Halfway through installation (same as OP) I get an error message.
I attempt a few more times to install the upgrade, with no success. I thought a good reset would sort this out. Upon restarting, my computer froze at the Apple logo and the 'turning gear'. I started to panic.
Multiple attempts to restart (I gave it 15 minutes or so before I gave up waiting for desktop to load).
I called Apple Care. Here's a few tips I learned from that call:
Eject a disc: Press 'Power' button, then hold trackpad down as 'clicked'.
Boot from disk: Press 'Power' and hold 'Option' - then wait for choices to show on screen and choose (internal HD, external HD, or disc).
Support walked me through disc utility, I verified my hard drive, and it threw errors. I then clicked repair, and an error came up urging me to recovery any data I can, as the hard drive has major problems.
Support set me up with an appointment a few hours later with Genius Bar at the closes Apple Store. The first rep was very helpful. We used their special tools to look at the hard drive files. She suggested we attempt to recover from the hard drive what we can. I purchased an external hard drive, and we began the transfer of whole hard drive over. I think they used target mode to access it.
I walked the mall for an hour - and came back to find that the drive spent an hour 'preparing' the download, but nothing actually transferred, and it eventually failed. They said there was also a hard drive error message of some kind.
I kept it overnight for the techs to look at. They had multiple problems with user access, and issues not being able to get anything off the computer.
I was freaking out about my data, as I'm in the middle of a MAJOR client project. So many hours about to be thrown away.
I come back the next day, and I ask to transfer a smaller file - the *most* important stuff one at a time if I have to. This actually works, and I was able to pull certain files off the hard drive, onto the external. GREAT NEWS.
I'm then told that the hard drive needs to be replaced. Faced with the pressure of foregoing ALL other files on my Mac, I decided to take my time, take the Mac home, and tinker with it myself. I'm familiar with computers (new to Macs tho), and I just knew that I could figure out a better solution.
At the Mac store, I purchased Drive Genius 3 in attempts to repair my hard drive.
It just didn't make sense to me that during a OS upgrade, my HARD DRIVE would *all of a sudden* break. It just sounded too much like a software issue, even thought the Genius Bar was telling me it was hardware.
So - tinkering around with Drive Genius 3, I verified and repair the HD, with no luck.
The program allows you to clone an image of one hard drive to another, so I cloned the Macbook hard drive to my external. During this process, it tells me there are some 'bad sectors, or nodes, or something, and asks if I'd like to just 'skip' them, and warns me that these files will not be accessible'. What choice do I have? So, I agree, and skip them all.
Once I had a clone on my external HD, I decided to test out booting from it. I turned on the computer, held 'option'. I chose to boot from the newly cloned external HD.
It took about 30 minutes, but it booted. I saw my desktop, everything in it's place.
Once desktop loaded, a prompt came up that said something like 'you're hard drive is totally screwed, and you're lucky to see this, and you should back everything up'.
Then, after reading this forum, I read the recommendation to go into disk utility, unpartition, repartition, and re-install. It hadn't occured to me that the upgrade was a full-install disk.
I'm now looking at my brand new installation, and am now dragging over my important files.
Thanks for everyone's help here, and hopefully this was helpful to someone.