I know this is for the Desktop version of Ubuntu, but I definitely plan on installing the server as well. I just want a GUI to manage my server.

Here is what I have done:

• Placed Ubuntu i386/32bit 12.04 LTS [DESKTOP] disc in the disc tray.
• The disc loads fine.
• Clicked install Ubuntu.
• Without checking the download updates while installing or install this third-party software.
• Clicked continue.

Mouse cursor turns to spinning circle and remains a spinning circle while the screen freezes its place at "Preparing to install Ubuntu".

• I tried not checking any of the boxes and clicking continue.
• I tried checking Download updates while installing.
• I tried checking Install this third-party software.
• I tried checking BOTH Download updates while installing AND Install
  this third-party software.

Does anyone else face this very same issue? Is there a workaround for this problem? Do I need to use a lower version of Ubuntu? If so, which version do you recommend for my system specifications?

My system meets the system requirements.

Here are my exact system specifications. (Custom modifications: 320GBx2 HDD && 256MB AGP GFX card && 1GBx2 RAM)