OK. So after booting bare-bones (essential software only) it did not solve the problem. I did everything I could think of, and I do mean everything. Made sure the cdrom drive was functioning and re installed drivers only to have it keep hanging.
Something I never thought of was to take the DVD out of the drive and try that. TA-DA. Solved the problem.
My question to the Acoustica team:
Why would this happen? Can you fix this? I would be interested to see if this happens to any other Windows 7 64bit users with a DVD in the drive during start up of the burner software. (It was an original non-burned DVD)
If there is a DVD in my XP machine and I start Acoustica it still starts but will tell you that there is a non-format CD in the drive.
So now I know, and anyone else who may encounter this error, what the issue is.
Thanks for all of your help