First make sure you haven't renamed the rfactor.exe or any mod/addon you've installed hasn't renamed it.
Also ensure you have administrator access. In Windows Vista/7 right click the rfactor.exe and select "Run As Administrator...". If you have a prior version of Windows, see your Windows documentation on how to set up full administrator rights.
In general, the error you report may be caused by a defective DVD, your DVD drive is not SafeDisc compatible, or the DVD drive (hardware and/or software) is not correctly installed, or a system level issue that is preventing the loader from locating the DVD.
Test the DVD in another computer and if the same error occurs, then the disc may be damaged.
If the disc works fine in another computer, this would likely indicate an issue on your computer that is preventing the disc from being located and/or read. This may be due to CD/DVD emulation software such as Daemon Tools (which you may have to uninstall), or a possible faulty or incorrectly installed DVD drive, or one that is not SafeDisc compatible (such as older or cheaper DVD drives). Check for firmware updates for your DVD drive at the drive's manufacturer website.