Right. After almost a day I finally sorted the problem.
Adobe Reader worked under the spare Admin account so I deleted that in case it was confusing the installer. I then rerpaired persmissions. I then re-installed Reader. Same problem "Internal Error"!!
So, I re-created another Admin account and opened Reader. No problem. After clicking accept licence it opened up with a question to make default or not. After this I hunted through every folder and found that Under 'User/Librarary/Application Support/Adobe' there was an Acrobat folder. When I checked the account I normally use there wasn't, and never was?? So I copied pasted a copy of the Acrobat folder into the same location on the non working account and all is fine.
Problem for me is, why did this happen? I wasted almost a day on this. Is it a problem with the installer, the Macbook or Permissions. I checked permissions and they are identical to those on the spare Admin account. So why did the installer not create the Acrobat folder on the main account from where it was installed? Reason it concerns me is with regard to updates. Will they also screw up?
I'll try to explore further as times goes on but for now I have to say I've had enough of Acrobat and Lion for one day. "It just works". Really???