I could not install Visual Studio 2005 in Windows 7 RC. With the Beta it worked fine.
The installation program says:
Some components must be installed in c:\Program Files\Microsoft Visual Studio 8\ directory. Check that you have write permissions and enough space in that directory.
60 GB free disk space, and elevated installation...
I tried installing in a user created directory also. Didn't work either.
I did install VS 2008 first.