Error 7 on NTKRNLPM.exe

I am trying to install Win2000 server on a clean system. PIII 800Mhz, 512meg memory

I am using the set up disks I made from the cd, during the install process I get the following on the blue screen

File \ntkrnlmp.exe could not be loaded
The error code is 7

Setup cannot continue. Press any key to continue

Can anyone help me out here?? I am dead in the water before I even get started!!!