UPDATE: It seems the problem was hardware related. Disc unreadable errors with perfectly good discs is one of the symptoms of an impending red ring of death.
My wife bought me Gears of War 2 for Christmas from Amazon. So far I've been unable to get past the start screen of the game due to a This disc is unreadable error and attempting to install the game to the hard drive fails at 40% complete. This is the only game in my library that exhibits this problem. I also got Grand Theft Auto IV and have been able to play that fine with no problems.
Searching online indicates that this is a widespread problem.
The only consistent thing about all the threads is that I have seen no confirmed solution to the problem. The best suggestion seems to be to return the disk to the retailer and ask for an exchange for a different Gears of War 2 disc. With this option there's still a chance of getting another bum disc and it seems this would be a difficult option to pursue with an online retailer like Amazon. There's also the option of sending my XBox in for repairs although given that the problem only exists with this one game, it is unclear that this is a problem with my actual hardware.
Before deciding to chalk up the $60 + tax my wife spent on this game to bad luck, I thought I'd throw up this blog post just in case one of my readers has encountered this problem and found a work around.
Merry Xmas!
Now Playing: The Notorious B.I.G. - You're Nobody (Til Somebody Kills You)