Have been downloading Mint 12 and LXDE with same issues. Didn't know could change LXDE to Mint 12.
You may need to enable the correct repositories, but the LXDE and GNOME desktops are built on the same base, so it should be simple ( note: you should be able to add any DE or WM to an install without major issues).
Are there known issues with using terminal to check md5sum?
Not that I am aware of.
I've been checking md5 of downloaded ISO. Is this wrong?
Should I first burn to dvd and then check md5?
No and no.
You should check the md5 sum of the download, then after burning, check the md5 sum on the CD/DVD, or use the boot option that checks it for you.
Maybe issue is my not totally understanding md5sum
If the tool you are using gives an output it shoud
be the correct output.
You could try downloading from a different OS/PC or network.
A torrent remains a good option, as skipped or incomplete packets will be re downloaded to keep the download accurate for you.