I had the exact same problem with the 5.1 U1 SSO Installer (updating from 5.1) saying "insert disk 1".
Afterwards, the vCenter Server is effectively bricked.
The only way to get it back working again reliably, is to stop the now bricked vCenter server. Then restore the RSA Database (if it's on a separate DB Server), then restore the vCenter VM from it's Snapshot you made before the upgrade and power the VM back up.
The solution is to copy the entire contents of the DVD ISO to a folder somewhere on the vCenter Server (in D:\Temp for example) and run the installer from there. Do not run the installer directly from the mounted ISO.
It is not the first time that stuff like this happens. In the past, there was a very similar problem with Update Manager (KB 1006565). The solution is the same as back then.