I’m having this problem too; whenever I try to install just about anything, I’ll get the same exact “Windows Installer has crashed” message. I try installing Halo off CD-ROM, and the crash message appears about 2-3 times throughout the setup. It’ll “install” in spite of this, but the game won’t launch at all if you try opening it. It installs fine on other systems, and other CD-ROM games I’ve tried installing have had no success (notably Fable: TLC).
I’ve also had other funky behaviour as well. I tried the Vista version of Spotify; without extended kernel it works, but with it installed it’ll crash upon launch and I’ll receive a Data Execution Prevention notification about it in the corner, regardless of whether DEP is turned on or off.
This is with Vista fully updated (including Server ‘08 updates) and the latest extended kernel, of course.