Nevermind - found this online and it's working ( I first uninstalled my partial downloaded installation by running the CD's setup.exe file, then got to step 2 below):
"I had the same problem, and I really have no idea why it happens or how to fix it. I have, however, found a workaround. I tend to just do this from the get-go instead of actually using the setup, because of weird issues like this.
- Don't run the disc setup; instead, https://support.steampowered.com/kb_article.php?ref=5414-TFBN-1352 your CD key manually, and abort the actual installation process.
- Open the https://support.steampowered.com/kb_article.php?ref=8794-YPHV-2033 window (Steam → Backup and Restore Games…).
- Select Restore a previous backup.
- Browse to the drive letter of the installation disc.
- Steam should tell you that it found a backup of Modern Warfare 3. Click next.
- The game will install from disc.
This has worked for me with MW3 specifically, and other games.
Note that you can't entirely avoid downloading it; you'll still have to download the latest patches to bring your game up to date."