I have the exact same problem, but let me confess more info.
It was running great, XP SP3. This machine is getting old and clunky,
I went into MSConfig and turned off a bunch of stuff to hopefully help
me out.... well next reboot it complained about not being able to
start the ID service I think. I did this once before so I ignored it,
planning on reinstalling later.
I removed it via the icon in the program group, said to save my
config.
Downloaded 1.2.2, attempted install and get exact same thing. I
looked, and the service was still in SERVICES so I went through the
registry and killed that off, rebooted.
Still the same error. I do not have administrator password but I'm
pretty sure I can install anything on this machine as I have had it 4
years and can get away with anything so far.
I'm going to grab your newer beta and try that for the heck of it.
Thanks for any ideas.