Fallout 3 will not install on windows 7

Hello, I recently did a clean install of Windows 7 x 64 bit. When I went to install Fallout 3 it did not install a start menu directory and would not start due to xlive.dll. I uninstalled the game and tried to re-install, but it would not even begin the installation. I am aware of the compatibiility fix for the game and the need to install the latest version of Games for Windows. At this point, I really just want to be able to install the game. I have tried to enable/fix Windows Installer.
 
Thanks to Hilbert for maybe coming up with a solution:

http://hardwareguru.com/news/fallout-3-install-agony-/

And yes .. once again a game that runs into problems due to copy-protection. Apparently people are having problems to install boxed copy of Fallout 3 because of 'shady' third-party programs that they have installed on their machines which conflict with Fallout 3's (and other games) installer.

...the person on the phone informed me that you have to uninstall any cd writing programs or image programs like nero, roxio, sonic, alcohol, daemon tools etc and only have the default windows cd writer on your computer...Saying that securom recognizes these as piracy tools basically. They also said if this doesn't work then you have to contact securom yourself about the issue. She told me there is nothing bethesda can do about this problem because of the securom software. Basically according to the call, it is securom's fault, let them handle it. She said we will have to wait for securom to release a fix if this doesn't work so my advice is to start harassing them.

I also asked if they have been getting many calls related to these issues of not being able to install the game, she said yes naturally. She also said these image and writing programs tell securom to read the disc incorrectly hence no wonder none of us have the real game according to securom. I have already uninstalled my cd writing programs but securom still persists in not letting me play my game ...

There's another forum post for those who have SecuROM issues with workaround instructions and a pointer to the SecuROM Website where there's a replacement launcher for Fallout 3, as well as a replacement launcher for Far Cry 2.
 
That actually didn't fix the issue. I have been going back and forth with Bethesda for a solution. I have tried everything, including:

Changing compatibility for the setup.exe file
Running as Administrator
Going to Services and making sure that Windows Installer and Installshield are on
Copying the files from the DVD to the desktop to run
Using the Securom download to fix the setup.exe
Uninstalling my DVD burning software
Turning off .Net framework
Deleting Temp files
Unregistering and then registering Windows Installer
Basically everything that I have found on the web.

I just know that somewhere there is a file or setting that needs to be changed in order to get the game to just install. Once I get it installed, I will be happy to try to fix everything else to get it to run. If nothing else, I plan to reinstall Windows this weekend.
 
This is getting interesting. Okay, for anyone else having this problem, I'm doing the research for you. Here is another possible solution:

InstallShield is most likely the cause of this. Go to your Start Panel and open up your main partition (by default it is My Computer\C:\). Go to “Organize” and select “Folder and Search Options”. Click on the “View” tab and scroll down. You should see “Show all hidden files and folders”. Select that and apply. Now, go to Program Files (C:\Program Files), and you should see a folder named as “InstallShield Installation Information”. Open that up and search for this folder: “{974C4B12-4D02-4879-85E0-61C95CC63E9E}”. Either delete or rename this folder. Or, if you don’t like precision work, you can simply rename the whole “InstallShield Installation Information” folder

Or simply:

Problem 1: Installshield
Solution:
1) Rename C:\Program Files (x86)\Common Files\InstallShield\
2) Reboot
3) Try Again
 

xNoXiOuS

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Don't go through the trouble =[ Fallout 3 for me and many others had irritating crash to desktop issues involving codecs, installed programs, resolution, and processors. If it doesn't work properly then you will drive yourself crazy trying to figure out what "fix" will fix the problem. Plus Bethesda has next to no support for any issues regarding the game. Big disappointment to be honest =/
 
Well that actually did fix the install problem. So far the game has been running well on a new i7-875k system w/8GB Dominator RAM, an Asus GTX480 on a sweet Samsung 27" screen. All settings are turned up to max, including 8x AA. I am playing with Games for Windows Live deactivated and the bonus DLC packs installed manually into the Fallout 3 folder.