|Had same problem and found that the MSIEXEC was jacked up after the system was hit by a Virus (AV, AIV, AV2009, AV2010)|
What to do
To solve this, re-register MsiExec:
1. At the taskbar, select Start|Run.
3. Then type
No visible change will take place. However, if you run the setup program again, it should now work.
If this method fails, you will need to reinstall the Microsoft Windows Installer (MSI). Consult the Microsoft website for details of how to do this
Then - Reinstall your antivirus and Scan your system.
And check system with a Anti-Spyware app like Spybot.