Have you got access to another PC you can try booting it on ?
As far as I can see there are only two possibilities
a) the DVD is duff
b) your BIOS boot sequence isn't what you think it is.
If you can verify that it boots elsewhere and eliminate a), then you can concentrate on the BIOS and work out why you're not finding it before the HDD.
Stupid question I'm sure, but were you watching as it booted, or did you just leave it and come back to find the normal system had booted ?
The reason I ask, is because the Vista DVD requires a "press any key" intervention to continue the boot, and without it just goes straight into normal Vista.
Terry, I sat and watched as the machine booted up with the Vista DVD in the drive. No screen came up asking for anything, simply booted directly from the C Drive. I went into the CMOS Settings, and changed the sequence for CD/DVD first, and HD second. Still ignored the Vista DVD. Im stymied.