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Error 1603: A fatal error occurred during installation

While trying to install vCenter Server, the installation of the included Microsoft SQL Server 2005 Express Edition failed. In the install logs, one can find something like this:

Error: Action "ReportChainingResults" threw an exception during execution.
One or more packages failed to install. Refer to logs for error details. : 1603
        Error Code: 0x80070643 (1603)
Windows Error Text: Fatal error during installation.
  Source File Name: sqlchaining\sqlchainingactions.cpp
Compiler Timestamp: Sat Oct 25 08:47:07 2008
     Function Name: sqls::ReportChainingResults::perform
Source Line Number: 3521
It turned out not to be a DCOM issue and Microsoft had KB 968749 in place: the solution would be to obtain the latest servicepack for MSSQL 2005 Server. But as the package was included with the VMware bundle, applying a service pack to a not-yet-installed version of MSSQL 2005 Server did not seem like a sound option. However, their workaround worked like a charm, I even tried the Fix it for me thingy: a small executable had to be downloaded and some Microsoft magic is applied to the system. After doing this, vCenter Server could be installed just fine.

Well, almost: the %systemdrive% was a bit low on space and the installation stopped when there was no more space. Windirstat revealed that %windir%\$hf_mig$ was pretty big, but should not be deleted. However, moving this directory to another drive should be OK. After doing that, a junction was created to satisfy the old pathname. With that in place, the installation continued and the system seems fine so far.