Ok, so heres How i fixed this situation. Sometimes the bigger dual format DVDs that come with mac installs have issues and are more often corrupted than the single layer 4.7gig DVDs. Sometimes the materials the DVD's are made from have issues with certain DVD drives as well. Knowing this I was successfully able to rip the install DVD onto my powerpc as an iso. I was going to transfer it over to my macbookbro and then, burn it, try the burnt cd. However, I realized that I can just use the DVD drive, which reads the disc fine, on my powerbook and install it to my macbook. Therefore, we have a clean install of Leopard onto my macbookpro. I put the powerbook into disk mode and plopped the DVD in and low and behold, the leopard install came up on my macbook. I installed leopard using my powerbook dvd drive!
I also ran into alot of people saying that they have had bad install discs sent to them. Im going to get apple to send me a new one since it seems like this one is undoubtedly corrupt. I also realize that hte only time the kernel wasnt able to read the disc was when it contained the install discs, obviously the disc is defective. If that turns out NOT to be the case, then I will be able to get it replaced under applecare.