I think I found an "alternative" solution to the corrupted sectors on disk 2.
The original solution didn't work for me... for whatever reason, Vista refuses to throw that error, reliably. I've wiped Vista at least twice, and reinstalled thereafter. I do remember beating my head against the wall, trying to get the Abort, Retry, Ignore error so I can bypass it.
Well, I wiped & reinstalled Vista again. The X3R bug came back, and I wanted to reinstall. Spent a couple hours trying to install X3R, then gave up, and simply ran it overnight. That didn't work... my system was powered off when I got up (I still don't know why... it sure isn't configured to power itself off). Maybe the optical drive gave issue when the system tried to go into standby.
Long story short, I resolved it... by simply copying the files from disk 2 to a temporary directory. The last two files to be copied were the mp3 files. Of course, the copy operation failed, due to the corrupt sectors on the disk. I just ignored 'em. I had previously downloaded and burned the uncorrupted mp3 files to a CD-R... so I copied them back into the soundtrack directory, with the rest of the mp3s. Then I just burned the files back onto a CD-R, titling the disk "DISK2".
Then I install X3R, without issue, using the new disk 2.
Caveat: I burned the CD using K3B, within my Gentoo Linux boot. I never got around to fighting Nero 7, getting it to install on Vista, when K3B is so accessible. But the copying and burning process should not differ between Linux and Windows...
The best part? No copyright protection was bypassed, so the DMCA doesn't apply in this case. Furthermore, the repair doesn't require redistribution of game resources (executable or data), any more than that provided by Egosoft & Enlight themselves (the uncorrupted mp3 files). Seein' as fair use includes the right to make a backup copy of the installation media, I'd be willing to claim that altering said backup copy to include proper & uncorrupted files would fall under fair use, too.