A good place to try to get an answer to your question
is MSDN's "Visual Studio Setup and Installation" forum :

http://forums.microsoft.com/MSDN/ShowForum.aspx?ForumID=26&SiteID=1

Juan T. Llibre, asp.net MVP
asp.net faq : http://asp.net.do/faq/
foros de asp.net, en español : http://asp.net.do/foros/
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Since you use Win2003(SP1), it is possible the "Software Restriction
Policies" of local group policy that causes the problem.

Do following:

1. Run "gpedit.msc" from "Start->Run"
2. In the Group Policy Editor, expand "Computer Configuration" on the left
side;
3. Expand "Windows Settings", you can see "Software restriction Policy";
4. If there is not policies defined, create a new policy by right-clicking
"Software Restriction Policies"
5. Right-click "Enforcement" on the right side, and select "Properties";
6. Select "All users except local administrators;
7. Apply and OK the policy;
8. Close "Group Policy Editor";
9. Run "gpupdate /force" from command line, if you do not want to restart
the machine; or simply reboot.
10. Make sure run the VS2008 installation as local admin

I am not sure if this will solve your problem or not, worth trying, anyway.