When installing on load balanced servers, the url of the site needs to resolve to the local server IP address and not the load balancer address. That allows the requests being sent from the installer to be directed to the local machine and not the LB address. If it gets routed to the LB address, it causes a machine hop and authentication fails.
The easiest way for this is to edit the Windows hosts file, but you will need to read this KB on configuring the BackConnectionHostNames http://support.microsoft.com/kb/896861.