Install Problem With SQL2005 Standard. Error 2908

I am attempting to install SQL Server 2005 on a Server 2003 Enterprise edition SP2 and fully Patched with all critical updates, including .net 3.5 Additional Information, this is on a Virtuial Server.
When I try to install it fails near the beginning and the log file contains the following.


Microsoft SQL Server 2005 9.00.1399.06
==============================
OS Version : Microsoft Windows Server 2003 family, Service Pack 1 (Build 3790)
Time : Mon Mar 24 07:34:15 2008

Machine : X205
Product : Microsoft SQL Server Setup Support Files (English)
Product Version : 9.00.1399.06
Install : Failed
Log File : C:Program FilesMicrosoft SQL Server90Setup BootstrapLOGFilesSQLSetup0004_X205_Support.log
Last Action : InstallFinalize
Error String : The installer has encountered an unexpected error. The error code is 2908. Could not register component {1F3316BE-825B-4390-A9D2-AF3EECCAE9F6}.
Error Number : 2908
====================================================================================

After doing some search engine digging I found some referances to simuilar problems being caused by .net. I tried uninstalling first 3.5, then 3.0 then 2.0sp1, at which point the install worked with only one error that SQL Management studio was unable to register (A bunch of black lines) although the sql installation seems to work. I then reinstalled .net 3.5 (Which also reinstalls 3.0 and updates 2.0 to SP1. Again S!QL seems to be healthy....
My Questions are:
1) is there a better way to do this???
2) If I do it this way do you see any l;ong term problems?

Kay