I know this may cause some contraversy with M$ if they ever read it, but Razor911 have hacked Halo 2's installer program and fixed it.
Jump onto your local torrent site and have a look for it.
Its just the 'setup.exe' file, and you have to copy the content from the DVD to your HD, replace the 'setup.exe' file and create a new DVD image.
Install the game from the fixed image and use your retail CD Key and everything works fine.