Error...The selected version 2.2.3 is not compatible with the selected install location.
When I first read your post, I had an idea of what might be wrong. The screen shot confirmed that. The server on which you are installing Moodle 2 does not have the required version of PHP (the language in which Moodle is coded).
This is a very common problem with web hosting companies. Contact your web host and ask if they can provide you with an account that has PHP 5.3.2 (or later). If not, you are out of luck and should try another hosting company.
I spoke to our hosting company and they have agreed to move us to a different server that does support PHP 5.3.2.
Should take a couple of days to get working.
Thanks for your great tip.