Omnipotent,
Unfortunately, I'm at a total loss here.
There certainly seems to be something fundamentally wrong, and I suspect it's some sort of conflict within your operating system. It's hard for me to point to a trouble with the OOTP installer, since the exact same installer seems to be working for thousands of customers. I don't mean that in a critical way, it's just where my troubleshooting is leading me.
I believe at this point you'd be best off taking this up with a site that is strong in troubleshooting Windows issues, like one of the following:
http://www.tek-tips.com
http://forums.techguy.org/
That second site, in particular, is where I go for pretty much all technical problems I run into.
Beyond that, I'd be looking at reinstalling the operating system.
Steve