How I solved the problem. *Warning these steps requires editing the Registry. If you choose to follow these steps, you accept all responsibility for your actions and any potential damages.* 1. Un-installed previous install attempts with "Microsoft Fix It". 2. Copy PSE install folder to the root of the system drive(c:). This can be done from  the CD or the Download Folder. 3. Deleted the regkey for "admui3.fon" Use regedit to search for admui3.fon, delete the key. 4. Add the regkey that will allow MS Installer Service to run in safe mode. See Link 4sysops.com/archives/tip-how-to-install-and-uninstall-a-program-in-safe-mode/ 6. Reboot into safemode 5. Delete the failed install folder  "\Program files (x86)\Adobe\Photoshop Elements <version>" 7. Start the Microsoft installer Service, goto a command prompt and type "net start msiserver". 8. Once the MSIServer has started, run the install of Photoshop 9. reboot Links: How to install and uninstall a program in Safe Mode http://4sysops.com/archives/tip-how-to-install-and-uninstall-a-program-in-safe-mode/ Fix problems that programs cannot be installed or uninstalled http://support.microsoft.com/mats/Program_Install_and_uninstall ... View more

I have the same problem and have been through all of the same steps. ... View more