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All the information on the internet says that _YOU_ have to have permissions to c:\windows\installer. It's wrong. NT AUTHORITY\SYSTEM must have full control of this directory to successfully run installshield installers, otherwise you get a 1607 error. In XP, Windows Installer is run as a service as "NT AUTHORITY\SYSTEM". It cannot update its own files unless that user has full control, as well as the administrator group. This is not necessarily the default if you reinstall windows without formatting the drive, as it doesn't always fix the ACLs right.