It seems to be an issue with slot-loading disc drives - I have this problem with two separate machines (an original Macbook Pro, and an iMac G5) - both drives will work with most discs fine, but with others it constantly eject them, as you describe (it's happened with some writable CD/DVD's, the OS X install disc, a game installer DVD etc - no obvious reason or pattern..)
They are both well outside any kind of warranty, and since the iMac is horrible to open up (it seems to be constructed with selotape and tinfoil..), and I rarely use the DVD drive on the laptop, I ended up buying an external USB DVD-burner - which you can buy them for about £30 now..
PPC machines cannot boot of a USB device, but luckily the internal drive would take the OS X install disc fine.. If that fails, you can boot from a secondary harddrive partition, or disc-image, which could be setup from a different machine