Same problem noted with installations under Windows 7
Well, count me in as yet another who saw this same problem with Windows 7. In my case, I have a netbook on which I have performed a clean install of 64-Bit Windows 7 Premium. Once a basic checkout assured me all was well, I proceeded with the installation of various other applications. All went well until recently, when I saw this problem and another also, of "Error 2203: Internal Error <filename.ipi> -2147287035". At first thinking a recent Windows 7 update might've corrupted the installer, I tried to think of what else might've changed.
What changed was something I'd deliberately changed and yet must've erred on. Namely, the permissions on the Documents and Settings junction (pointing to C:\Users) where I had taken ownership of all content so that I could navigate this and all underlying junctions as if they were the Windows XP folders I was already familiar with. Using a "Take Ownership" utility I'd found online, it seems this may have corrupted some permissions although prior use of the same utility on Vista hadn't created such a problem for me. I found that the security permissions on Documents and Settings did not include a SYSTEM entry with full control, so I added that, yet the problem persisted. So, I went from there to the Users folder and checked its permissions. Although everything looked OK, I decided to add my own user account to the permissions, with full control, and replicate that through all subdirectories of Users.
That took care of the problem and all subsequent installations went smoothly.
In essence, if you're a user who hacks or tweaks your O/S installation to perform the way you want, and notably if you do anything affecting permissions on system files, directories, or junctions, take heed that doing so incorrectly may yield a problem such as this. If you're the only user of your PC as I am, and thus also the adminstrator, you should be able to grant full permissions to yourself and SYSTEM in those areas and be back in business.
Regards,
Daryl