What does this mean?
"This install is intended to be used with the Daemon-Tools (or similar) CD image mounting procedure."
And, why can't I find LB2.exe in the folder /Jane's/Longbow 2 after running this install program?
It means that most people will find it more beneficial to use a CD image mounting process, as this cuts down terrain map load times and means that you don't have to keep using the CDs. Daemon-Tools is the most popular tool to use to mount CD images.
Your LB2.exe file was probably quarantined or removed by your anti-virus program. This file is known to have a false-positive virus (meaning it is in fact not harmful) that AV programs still keep picking up on.