For the longest time (well 6 months at least) I’ve had problems with Installshield and installing applications. Finally, I think I may have come up with solution (well, on this particular occasion at least).
Check the root directory (c:\) for a FILE called "Program" if this file exists delete it, apparently it often causes problems for windows installers, it may reappear later so if you have problems with another installer, check this file again.
I found that this file was created by BeSweet, a program I installed about a year ago. Why couldn’t Installshield just fix this problem? Half the hits on my blog are from people researching Installshield errors!