Have you checked if no dialog are in the background, maybe asking for WDIR folder or Licensing?
We had something similar where an installation hung when changing from 2005 to 2007. I think our VAR told us to do this, and after that the installation went OK.
From a command prompt, navigate to the c:\mentorgraphics\win32 directory and run configurator –clean
If that didn't work, the VAR said we should try c:\mentorgraphics\win32 directory and run configurator –uninstall
(but according to old email, the -clean command is what we used)
I also had this problem. Solutions:
1) manually kill the process "Setup.exe"; the setup will finish but will ask you to reboot before you may use PADS.
2) Upgrade to 9.0.1, it does not seem to have this issue.