Ultima Installer

I get 'Windows Installation Service could not be accessed. Windows installer not correctly installed' when I try to install various programs, mostly smaller shareware type stuff. I checked the 'service' and its set to run 'manual'.
Otherwise I'm a little over my head with playing with the installer.

The PC is a 1 gig Core2Duo 6600 running Vista Ultima x86 (dual booted with XP Pro).

I've also tried to reinstall .NET 3.5, it ran through its paces but just stopped at the end of the process with no indication of completion.

Any ideas?