I don't know if this will be relevant to many other people, but after LITERALLY 15 hours of trying to get this game to install, I am finally making progress. As a note, this is off a HARD COPY of the game.
Here is what I did:

Get to the actual installer part, where you choose the directory for install and where the below minimum specs error comes up; to get to this point I did:
- Run the setup off the disk
- If it hangs on you, go to your battle.net folder in C:/ProgramData/Battle.net and then go to the Agent folder > Agent.524 > and open the application in that folder and just let it run
For me, this got me past the updating setup files stage and into the actual installer itself.

From here, my installer gave me the "Below minimum specifications, based on an old operating system" error, which I know to be garbage as I'm using Win7 64 Ultimate.

After 10 hours or so of messing around this is what worked for me:
- Open the contents of your disk and drag the contents into a folder on the desktop (I named mine D3)
- Go back to your agent directory in your battle.net folder, and change ALL of the .exe applications in ALL of the subfolders of Agent directory into Compatibility Mode: Windows 7, and ALL of the .exe applications in ALL of the subfolders to Run as Administrator (for both of these just tick the checkboxes in properties under the "Compatibility" tab.
- Once the files have finished copying from your disk into your folder on the desktop, go to the properties of the Diablo III Setup.exe and change the Compatibility to Windows 7, and check the Run as Administrator box.
- Run the installer, and choose the path you want it installed in, and voila!!

I hope this helps as many people as possible, because Lord knows I do not wish for anyone to have to endure the pain I went through JUST to get this game to INSTALL!