Interesting. I purchased a downloadable version of Microsoft Office Enterprise 2007, and it WOULD NOT install on XP Home SP3. I had to install it on another PC that had Windows 7 Home Premium 64-bit on it. And no, I did not download a 64-bit specific version.
I'm having the same problem. Running XP SP3 and I can't install Office Ultimate 2007. Error message is simple "Microsoft Office Ultimate 2007 encountered an error during setup". That's it, nowhere to go from there . . . .