I have not been able to repair the problem yet but I have been working with a Microsoft support agent and I can share the steps he has walked me thru thus far and you can see if they work for your situation.
First, you should know the original Windows Installer 3.1 had bugs and was replaced by Installer 3.1 redistributable version 2. Try searching support.microsoft.com to find it, download it and see it it will install. If not here at the steps from MS....
This issue can be caused by the previous file downloads being corrupted.
I suggest we perform a System Restore to back up the system to a state before the issue had occurred.
Note: If you have some important documents or files which were created after the restore point, please copy them to My Documents. By doing this, even if you back the system up to the initial status, the documents will be saved in My Documents.
To restore your system to a previous state, we can use the following steps:
1. Before you start, please close all open files and close all open programs.
2. Click "Start"; click "Programs or All Programs"; click "Accessories"; click "System Tools"; and click "System Restore". The System Restore user interface should appear.
3. Select "Restore my computer to an earlier time" and click "Next".
4. From the restore points available, select an appropriate restore point when your system was working correctly and click "Next".
5. Click "Next" again. The restore process will run and your system will restart automatically.
6. After restarting, check whether your system functions correctly now. If not, you can undo your last restoration or select another restore point in the System Restore user interface.
For more information, please refer to the following Microsoft Knowledge Base article:
Title: Restore the Operating System to a Previous State in Windows XP
After we perform the System Restore, please download the package again Wrom: http://www.microsoft...en&Hash=8T6PHSD
If the issue persists, please try the following steps to troubleshoot:
Step 1: Disable and Enable System Restore to clear the corrupted restore point.
1. Click Start, click Run, input "SYSDM.CPL" (without quotation marks) and press Enter.
2. On the "System Restore" tab, click to check the "Turn off System Restore on all drives" box, and click OK.
3. Please repeat the above steps to enable System Restore again.
Step 2: Check for viruses
I suggest we use Symantec's online Virus & Security checker to examine your computer's security status: http://security.syma...id=ie&venid=sym
Click GO to proceed with a security scan and virus detection.
If you find a worm virus, please obtain the latest removal tools from Symantec: http://securityrespo...tools.list.html
Step 3: Disable the Automatic Updates feature
1. Click Start, click Run, enter "SYSDM.CPL" (without quotation marks) and then press Enter.
2. On the Automatic Updates tab, select the option "Turn off Automatic Updates", and then click OK.
Step 4: Go to the Windows Update website to scan again to check whether Windows Installer 3.1 is still offered. http://v5.windowsupd...t.aspx?ln=en-us
If yes, please check whether it can be installed this time.