Do you receive any error messages during the installation process? You can double check by running the Adobe Support Advisor - http://www.adobe.com/support/loganalyzer/ to review your installation logs.
The complete steps which the Adobe Support Advisor identified can be found at http://helpx.adobe.com/creative-suite/kb/troubleshoot-error-messages-b ootstrapper-cs5.html. The specific portion which is relevant to your situation is as follows:
A restart is pending (Windows)
If receive the error "Installer has detected that a machine restart is pending. It is recommended that you quit the installer, restart try again," do the following:
Disclaimer: This procedure involves editing the Windows registry. Adobe doesn't provide support for editing the registry, which contains critical system and application information. Make sure to back up the registry before editing it. For more information about the registry, see Windows registry information for advanced users on the Microsoft support site, or contact Microsoft.
From your description of steps performed it appears you will want to proceed with Step 2 of editing your registry. You may also want to try running Windows Update and seeing if there is any updates available or pending.
Okay, I just run Windows Update and installed the updates. Uninstalled Photoshop, checked in the registry for the InProgress key, I couldn't find it. I restarted after this and when I went to install Photoshop again, I didn't get the restart message but after installation completed, I tried to run Photoshop and I still get the same message as in the 1st post.
I checked the support bit and there are no new error messages.
Ok moving this over to the Photoshop General Discussion forum then. At least it appears we have cleared out the install error. The users in this forum should be able to offer troubleshooting steps more specific to launching Photoshop itself.