I vaguely remember running into this problem before with an installation, and I think it was Smartsuite. In my situation, it was caused by an poorly written algorithm for calculating diskspace. It didn't account for the increasing sizes of hard drives. It could calculate size up to 4GB, but then would reset to 0 if it saw space above that.
When writing a keygen, the author will identify the algorithm used in creating a valid cd key. Once the algorithm is identified they can then incorporate this into the keygen. If you search a warez download site for 'lotus smartsuite 9.8 keygen', this often means your download includes a keygen.
If it needed 400MB space and there was 4300MB free, it would think that there was only 300MB free and give that error. The fix was obviously to add more programs or free some more space so that it was tricked into thinking enough space was present. Or you could install it on a smaller partition. It's been a while and my memory on this issue is foggy. Since I'm not positive this is the fix, you might want to try other things first.