Just experienced this on a new ASUS system with Vista Ultimate and a trial version of Office System 2007 preinstalled.
After removing the trial version I was unable to install my full version of Office Enterprise 2007. Same error message as you state here.
In my case, it was a service named "
InCD Helper" (a part of
Nero 7 Essentials) that caused the problem -
I stopped this service, and I was then able to start setup.exe without errors.
Check to see if your system has "Nero 7 Essentials" pre-installed, try to stop the "InCD Helper" service, and retry your installation.