Whenever you insert Disc 1 of Adobe CS4 and run the setup, you will see a gray screen pop up "preparing for setup". Typically after this screen, you will get to the usual selection screen of what components to be installed as well as prompt for serial number. However, in Mountain Lion and some Lion machines, CS4 will be stuck at the gray screen "preparing for setup" and be frozen at the last 7/8 of the bar. I do notice a disk partition being mounted and disappear, but then again, that was in Lion. Mountain Lion just refuse to load the selection screen for installation.
Have you tried right clicking on the installer and selecting Open? You can find more details on this at Error "has not been signed by a recognized distributor" | Launch Adobe applications | Mac OS - http://helpx.adobe.com/x-productkb/global/error-signed-distributor-mac -os.html.
I have just tested launching the installer for Photoshop CS4 under 10.8 and the installer did launch successfully. At this point I would recommend completing the steps listed at Troubleshoot system errors, freezes | Mac OS 10.x | Adobe software - http://helpx.adobe.com/x-productkb/global/troubleshoot-system-errors-f reezes-mac.html.
Sorry, I know this is an old thread, but I ran into the same problem, and my search brought me here. I finally figured out the issue. If you've tried installing and had the AIR error, and you've downloaded the latest version of AIR like you're instructed to do, then you try running the install again, it will treat it like a custom installation. You have to scroll down through the programs on the right hand side of the window and select the programs you want to install. Deselect Adobe AIR, Acrobat.com, and Adobe Media Player (they can be downloaded separately later), but select everything else, then click "Install". It should get you past the "Preparing for setup" screen - http://helpx.adobe.com/creative-suite/kb/installation-creative-suite-4 -or.html