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Everytime I try to install the Demo I get this error.
I have Mac OS X 10.6.8 (160 GB of free HD space) I haven't a clue what the problem is.
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I just tried to duplicate the install behavior which you are experiencing but I was unable to. From the screen you posted it looks like you are trying to install the Akamai download manager 2.0 but when I just started the download of Captivate CS5.5 it used Akamai Download Manager 3.0 which does not install anything.
Did you try to download Captivate CS5.5 from http://www.adobe.com/cfusion/tdrc/index.cfm?product=captivate&loc=en%5Fus?
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Which web browser are you using btw? Have you tried a different web browser?
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Try to uninstall the Akamai Download Manager and then re-download Captivate form the above link mentioned by Jeff and try installing it. Check if it gets installed.