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i use 2 hard drives, a 2 gb for the os and utilities and a 40 for everything else. when i incorrectly tried to install onto the smaller one, i got the disk 5 conundrum as well. no idea what the cause is but you might want to check for disk space and possibly defrag before installing.
wasnt there a problem with the uninstaller not clearing the registry? if you're comfortable with it, run regedit and check your windows registry for any vestigial bg2 files.
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