What version of windows is on there right now? SP2 or SP1? If you need SP2, you can download it directly from MS at:
http://www.microsoft.com/downloads/d...displaylang=en
Alternatively, if you had to install SP2 because you have an SP1 disk, you can remove it from add/remove programs. Then it's just a matter of reinstalling it.
Have you tried manually starting the Windows Installer service from services.msc?
Here's a link that talks a little about windows installer issues
http://support.microsoft.com/kb/555175
Hopefully some of this will help you.