Just been having a quick look at this, MSI error 1603 combined with the failure to register the DLL looks to be a permissions issue.  There’s some more information on it here – http://support.microsoft.com/kb/834484
I’d still recommend installing from SP1, but you should also run through and check the permissions both of the account you’re installing and the System permissions assigned to the Windows, System32 and Program Files Folders, also for folder permissions check the default inheritance is correct.