I had been searching for the past three days to find out a solution to this error with no avail. The solution InstallShield posts is outdated (up to XP) which didn't work for me.

So I had a epiphany and it worked!

The solution InstallShield gives is located here.

Here is what I did:
1. Disable Virus Protection. I have Kaspersky Internet Security and it likes blocking things (good AV, but you have to pay attention to it) so to be on the safe side, I temporarily disabled it. May or may not be necessary.
2. Disable UAC. Again, not sure if it is necessary, but I find it annoying at times. I have found some drivers and programs need it disabled to install anyway (older ones). It does protect you, so I would not recommend leaving it disabled, no matter how annoying it is. How to do it is located here.
3. Stop msiserver process (Windows Installer). To do this ctrl+alt+del and select task manager. Click on the services tab and right click msiserver and select Stop Service.
4. Install problem setup. This will restart msiserver automatically and should then install normally. Did this with Cable Unlimited's usb wireless drivers and it worked (their tech support is lacking and still haven't got a response after four days).

I'm not sure if this will work on windows 7 because I have yet to run across on it, but should work on both x32 and x64 Vista Installs. If it works in widows 7 or if this doesn't work for you and you found another way that did, then post here.