We saw this issue when installing Sage ACT! 2011 for a client on a Windows 7 machine earlier this week. The installer kept prompting that a reboot was pending and necessary to proceed.
After a reboot, the installer gave the same message. We went through many different hoops and troubleshooting, including deleting the registry values as outlined in this article: Sage Software Online Support Article
Nothing seemed to work, and no answer was available online. After many headaches, the solution turned out relatively simple; We needed to log in as the domain admin for his network and reboot.
So, a relatively rare issue, but if this happens to you, maybe you can go ahead and give it a shot! At least now an additional possible step is available on the net for this error.