I was able to resolve this issue by re-downloading the Xubuntu Live CD
ISO. I didn't check the MD5 sum, but since re-downloading made the
installation work without "input/output error", the previous ISO was
probably corrupted. (Downloaded through BitTorrent the first time, while
using a "normal" mirror the second time.)

The error message seems a bit counter-intuitive. Is there a specific
reason why an I/O error occurs instead of a more specific one?

For the record, the following I tried did NOT resolve the issue:
Deactivate PAE/NX on the VM, set HDD to not be detected as an SSD,
changed virtual HDD from SATA to IDE.

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https://bugs.launchpad.net/bugs/1622601

Title:
  Xubuntu 16.04 installer crashes in VirtualBox on Lenovo ThinkPad P50

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