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Seems to me some program running in the background might be interfering with the installation process.
You can try the following steps :
> Enable the hidden Admin Account on Windows 7 ( Ref : http://www.howtogeek.com/howto/windows-vista/enable-the-hidden-adminis trator-account-on-windows-vista/ )
> Disable all Non-Microsoft Startup Services. (Ref : http://helpx.adobe.com/x-productkb/global/disable-startup-items-servic es-windows.html )
> Disable all the Antivirus softwares like CA, Norton,Mc Afee etc. temporarily from the computer.
Reboot and try installing and check.
I'm getting error message 1935. I've tried to fix it. Looks like I might have to reinstall Win 7. I really need to be able to use my PS. Thanks for trying.