I have created a simple Web Application that just contains default.aspx and a
web.config.  I have added a Web Setup project to this solution, it Built Fine
in VS2008.  The installer works fine on windows Vista x64, but fails on the
Virtual Machines of XP and 2003 R2.  The installer reads "The installer was
interrupted before [Setup name] could be installed.  You need to restart the
installer to try again."  
Both of the installer logs contain this:
MSI (c) (AC:48) ... Note: 1: 2262 2: Error 3: -2147287038
DEBUG: Error 2769:  Custom Action WEBCA_EvaluateURLsNoFail did not close 2
MSIHANDLEs.
The installer has encountered an unexpected error installing this package.
This may indicate a problem with this package. The error code is 2769. The
arguments are: WEBCA_EvaluateURLsNoFail, 2,
Action ended 18:24:08: WEBCA_EvaluateURLsNoFail. Return value 1.

I have looked this up and the only offered solution is to run it as
administrator.  I have tried running it under an Account in Administrators
and as the local Administrator and still got the same message.

Does anyone know what is going on here?  Even if I create a sample project
within one of these VM, it still gives me the same error.

Log:
(too big for here)
http://robinsoft.no-ip.biz/dev/dotnet/errors/WebSetupProjectErrors.txt
Thanks