Having the same problem. Got the straight arm from Apple Support (see below what I submitted to Apple.com/feedback). Called back again and was redirected to the Up To Date program at 888.840.8433. They took my information and are deciding if they will send out a new DVD. Sheesh.
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I upgraded to iLife 2011 as part of the Up To Date program. I purchased my first Mac a few weeks ago, in mid November.
I tried to install iLife 2011 several times, but would fail part way through. I jumped on the Apple user forums to try to help myself and learned that many other users were seeing the same error, and that getting iLife 2011 to may require a custom, per-application install for some users.
http://discussions.apple.com/thread.jspa?messageID=12467608�
The failed iLife install also screwed up my existing iPhoto library. I had to spend a couple of hours fixing it. I still haven't checked if my data in the other iLife applications is corrupted yet, it may be.
I called iPhoto support to have them note the error and to request a refund on the $7 Up To Date program charge (sales tax on the full price of iLife 2011).
The agent that "helped" me, Kathy or Cathy I believe, was completely defiant and shoved the problem back in my face. She blamed it on an Adobe plugin (I have no Adobe SW whatsoever installed on my iMac). Totally high and mighty Apple in her attitude. I created the problem apparently. So much for great Apple customer service. The new boss is the same as the old boss.
Then Kathy transferred me to another department to process my $7 refund for iLife 2011 Up to Date. This guy refused to refund the measly $7 because the wrapping was taken off of the software package. Ha!
Overall, one of the worst customer service experiences I've had in a couple of years. I finally decided to try a Mac, and now I'm wishing I had just stuck with Windows 7.