I received this error when trying to install the Business Contacts Manager that came with Microsoft Office Professional 2007.
After getting the exact same error when installing Microsoft Office Accounting 2009, I decided to try and find a fix again (didn't look much the first time as I don't really need Business Contacts Manager), and finally found one (thanks to NeilH10 in the MSDN Forums).
For those experiencing this, the following is what you need to do to resolve this;
1. Load Programs and Features (Windows Vista/Windows 7) or Add/Remove Programs (Windows XP or below)
2. Uninstall the following;
Microsoft SQL Server native client
Microsoft SQL Server Setup Support files
Microsoft SQL Server VSS writer
3. Delete or rename, the contents of the following folder
C:\Program Files\Microsoft SQL Server\
4. Re-run the installer for Business Contacts Manager (or whichever program's installer gave the error)
The above fix worked perfectly for me on Vista.
Surprisingly, I wasn't able to identify anything at all on the Microsoft site concerning this particular issue?