othman,
I can't repro the issue you are seeing, but I will try to help as I
can. It looks like you may have issues with your system. here is an
idea: if you are admin on the box, create a new profile, logon to it
and try to install just to see what happens. I am trying to read
between the lines here, but it seems that either of have an
inconsistent state system (having an installed service but missing a
file - error 2), or you may have a 'murky' anti-virus interfering.
few things to think about:
1) can you install anything at all?
2) what was the last thing you installed on the box?
3) have you looked at the event viewer log to see if there is any
additional information?
4) is windows installer service running fine?
5) are you familiar with procmon? try installing it and take a look at
what is going on.