I tried installing the Steam version from the disc but I was having problems

The only way to get the game running is by installing it either from the disk (which needs steam to run). It will then update to the latest version.

If you are having issues with installing please post more information on what problems you are having like error messages and such.

Yeah, knowing what's the problem would be nice..

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Try to install steam from here first: http://store.steampowered.com/about/

...then continue from your disk.

Maybe that would help you a lot: https://support.steampowered.com/kb_article.php?ref=5357-FSQM-0382

MY ADDITIONAL NOTE:
The correct path for Windows 7 64 installation is "C:\Program Files (x86)\Steam\Steam.exe" -install E:

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The latest patch will be installed automatically via steam...

As for the Unofficial patches, those can be found here: http://afkmods.iguanadons.net/index.php?/files/category/95-unofficial-patch-project/

Basically I am having a problem installing steam from the dvd. I tried using the steam launch option to install the game from the disc.

I searched online for tips and used these instructions:

"Log in to Steam and click on Library.
Right-click on the game, select Delete local content, and confirm.
Insert the first disc into your computer.
Close Steam (Steam > Exit).
Press Windows Key + R to open Run
In the Run window type:

C:\Program Files\Steam\Steam.exe" -install E:

Replace E: with the CD/DVD drive you are installing from if is not correct.
Replace C:\Program Files\Steam if your Steam installation is not in the default location.
Press OK. Steam will launch and ask you to sign in if you do not have your password saved. Your installation should continue from the disc."

But so far I'm not getting any luck.

Just download steam from here: http://store.steampowered.com/about/

...let it finish, and then try the setup.exe from your Skyrim DVD. [ What happens ??? ]

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That's how i did it, three times so far.

I also do a fresh install of steam directly from Steam site whenever I re-install windows. Then I run and login into steam before I insert a game disk. I prefer using game disks since I only have 10 gigs download cap.

I rebooted the PC and it seems the problem was caused by my slow connection. Installing steam from the website before putting in the disk solved the issue. I was able to log into steam and get the latest patch.

Thanks for all the help.