I am using the install disk which came with the old macbook pro, it was still in its case and everything (it was all kept together).
I ended up solving the issue with a generic OS X disk (Snow Leopard 10.6).
Now I may want to tackle finding out why CD's wont eject from the CD rom drive. You hear the mechanism try to eject it but nothing happens. Not to concerned about it either way.
Thanks ijack and COLGeek for your assistance. This is my first time setting up a Mac in all my years of doing PC's it has been an interesting ride so far.
Glad you found a good solution. Interesting on the issue that the original disks wouldn't work. Did you, by chance, replace the mobo with the exact same model as you removed or one that was simply compatible with the MBP? I, too, inherited a MBP when my daughter's broke last year and she got a new one. When I thought the mobo was bad (turned out to be a defective HDD cable....but that is another story), I did some reserach on replacing the logic board. There are actually several that would physically work in my system. Could be that the original install media didn't find the exact hardware it was looking for and gerneated the error you saw.
Have fun with your MBP. I use my with both OS X and Win 7 (Boot Camp) primarily as a learning tool and to help out my daughter when she needs help from afar.