It's too bad this is such an old topic. But I ran into the same problem and don't see a recent solution. Maybe someone will happen upon this during a Search and this will help them find a solution.
I did see several people post that this is a pirating issue, but mine wasn't.
Seems there are (at least) TWO different versions of this game on CD. One is a "pre-patched" version, and one is a "post-patch" version. I have both, and I am missing one of the CDs (disc 2) of the "post-patch" version. When I tried to install the game again, I used CD 1 of the "post-patch" version and it popped up that same error message when I stuck in CD 2 of the "pre-patch" version. My CD 2 doesn't have the assets3.pk3 file that the installer needed. Nothing would fix it, and a search turned up several warnings that I "must have a pirated copy". What a terribly near-sighted thing to say to people that have legit copies.
Anyway, I can't offer a solution really, since this isn't a fix or anything, but maybe it will help any of the owners of legitimate copies out there figure out if they have mismatched versions like I have.
The pre-patched discs have a "version number" printed on them that's just all numbers. The post-patched discs have a very similar number with "R01" at the end. Sorry, I don't have the exact numbers handy here at work, will post later.
This was the thread I saw that prompted my post:
http://www.lucasforums.com/showthread.php?t=147905)
It's locked so I couldn't post in there.