1. Go to Add/Remove Programs and remove everything associated with MS Office.

2. Reboot.

3. Do a search online for MS Office 2007 Resource Kit and download it (they are available on microsoft's website if you can ever find them. Probably just easier to Google it).

4. Run the 2007 Resource Kit. Use the Removal Wizard.

5. Select delete ALL PREVIOUS VERSIONS of MS Office. It will delete a list of files.

6. Next, manually delete the files that are still left behind. Delete these folders -

C:\Program Files\Microsoft Office
C:\Program Files\Common Files\Microsoft Shared\OFFICE11 (or "OFFICE")
C:\Documents and Settings\All Users\Application Data\Microsoft\OFFICE

After this you should be able to re-install correctly without the error you are receiving.

Hope this helps.