I'm having the exact same problem as the OP when I try to install on my windows XP 32 bit Virtual Machine that I reserve for VN's and on my native 64-bit Win 7 Ultimate. This is with the latest 1.05 patch- I had different errors with the older patches.
Sorry to say but despite all my technical knowledge and computer-fu I haven't the foggiest as to what's wrong or what to do about it.