Things I've done so far:
-I've waited few good minutes for it to resume but it doesn't.
-I've tried killing the setup process via Task Manager (but the process doesn't get killed either. I'm left with no option but to reset my pc - pc responds to other programs very well but doesn't respond and/or kill the installer).
-Tried reinstalling Daemon Tools
-Tried Turning Off Avira Real Time Protection
All but to no avail...

Necassary Info:
I'm using Windows XP SP3
I'm using Daemon Tools Lite 4.49.1
I noticed the similar behaviour when I tried to Install Sims 2 (4 CDs ISO - The Installer would hangup when I'd mount CD 2).
Please note that I've successfully mounted ISOs and used them before. In fact, just before trying to install Sims 2 (4 CDs ISO). I'd successfully installed Mafia: The City of Lost Heavens (3 CDs ISO) downloaded from this very site. I've also checked the SFV files for the said game (80 days) and they are reported to be OK.
Hence, I'm quite surprised as to why it stopped working all of a sudden. I've tried my level best to search for this issue but found no answer. Please help.
