Tried a myriad of things to try fixing: Windows installer 4.5 reinstall, sfc /scannow, Upgrade from XP SP2 to SP3 and patching to current, deleting c:\Program Files\Common Files\Installer\ folder, checking shell Folders in regedit for network paths, creating new profiles etc no help. Background: This is an image of XP that was customized using either sysprep, or the OEM rebranding tools/nlite style windows setup repackagers. I think there's times where File or registry ACL's are modified from default using those tools and then causes file write errors.
FIX: Open cmd prompt as administrator and run:
"secedit /configure /cfg %windir%\repair\secsetup.inf /db secsetup.sdb /verbose" (no quotes). This uses a microsoft default file/folder/registry permissions template file to overwrite system items. Reboot, and try again