Is it actually downloading, or does it actually say verifying instead? The first thing that usually happens when the game is copied over like this is that it notices that things are different and it first verifies that the came is correct and up to date. This looks a lot like it's downloading.
You can also check BillZBubba's Guide for Moving CoH or Installing Test. It has lots of useful info for this situation.
Global @StarGeek
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Thanks Star Geek will give Bill's guide a whirl
Too many 50's to list here's a few you may know.
Slazenger, Area51, Area53, Area54, Erruption, Mind Plague, Thresher, Sheath, Broadside, Debt
Well assuming the files you copied didn't become corrupted somehow it should work since it's basically a modification of the method used to do a quick install of the test server.
http://wiki.cohtitan.com/wiki/Test_server
A few things I can think to check:
1. Is it actually downloading or is it just verifying? Sometime you have to restart the installer a couple of time to get it to verify instead of download
2. Is it trying to install in the wrong directory? The default directory is C:\Program Files\City of Heroes, if you're trying to install to a different path it might not have set it correctly.
3. Try deleting the ".checksum" files in the root directory (alternatively try deleting everything except for the installer and the /piggs directory, you'll have to download some stuff but the /piggs directory is the large portion of the download)
Adeon Hawkwood's points 2 and 3 are also very good advice.
Global @StarGeek
ParagonWiki.com-The original is still the best!
My Hero Merit rolls
Accuracy needed for 95% ToHit spreadsheet
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Search Wiki Patch notes, add site:ParagonWiki.com inurl:patch_notes to your Google Search
yeah it keeps trying to download all the patches as if they are not there, and as the last copy I have been able to use is the good/evil combined version that's alot of patches, tried stopping and restarting but at no time is it verifying, it just keeps trying to download.
Too many 50's to list here's a few you may know.
Slazenger, Area51, Area53, Area54, Erruption, Mind Plague, Thresher, Sheath, Broadside, Debt
Point 2 Hawkwood on your list, I was installing into correct directory so that wasn't problem.
and Point 3 I'm not gonna try atm, 
as have downloaded the 3gb worth of patches now, this was more of a future thing if i had same problem again.
Just wanted some workarounds now that I have CoH on disc and trying to figure what went wrong so If I get a problem again I don't make same mistakes.
All of these solutions will help me in the future thanks very much.
Too many 50's to list here's a few you may know.
Slazenger, Area51, Area53, Area54, Erruption, Mind Plague, Thresher, Sheath, Broadside, Debt
Hi all, I just upgraded to windows 7 64-bit, before i did that i copied my existing CoH folder to a DvD just incase of problems.
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Now I did hit a snag and my folder didn't transfer over correctly, no problem I thought as i put the folder onto DvD.
So I put DvD in copied files from DvD back to Hard Drive clicked on the updater and to my surprise it starts trying to download 3gb
Now i'm from the EU so cannot get a DvD copy of game for upto GR, and now with this extra 3gb download I will exceed my monthly ISP limit costing me £20
Can someone tell me what I did wrong and maybe post a simple work around/solution so this won't happen again as I'm not gonna pay £20 again and will just give the game up.
Too many 50's to list here's a few you may know.
Slazenger, Area51, Area53, Area54, Erruption, Mind Plague, Thresher, Sheath, Broadside, Debt