Just as a note if you are distributing this package via SMS 2003 I have found success by repackaging the MATLAB unattended Install and converting to MSI. This alleviates issues with having to share the ini file used for the setup inputs.
Mathworks have confirmed there is a bug in the unattended installer of R14 7.x (definitely the case with the SP1 cd set) where the location of cd2 and cd3 specified in the installer.ini is not recognised.
The solution is to copy the zip files from the archive folders of cd's 2 and 3 into the archive folder of cd1 and then delete the MATINFO.ENC from the cd1 root. The installer.ini should leave blank the location info for cd2 and cd3