This issue may occur if one of the following scenarios is true:

• The user who is installing the program, or the user who is opening the program or file does not have sufficient permissions to modify sections of the registry that is required to perform the action. The permission for the Everyone group of the registry subkey noted in the error message is not set to Full Control.
• There is a third-party application on the system that is denying the required access to the registry subkey. In most cases, this behavior is caused by WebRoot Spysweeper.
• The non-administrative user accounts on the computer do not have permission to modify specific files that are used by the Office 2003 Setup program or the Office XP Setup program. These files are used by the Office 2003 Setup program or the Office XP Setup program to register different accounts for access to the Office programs. This issue may occur if a Group Policy high-security template was applied to the computer and if the high-security template restricts access to the following file:
  • Office 2003C:\Documents and Settings\All Users\Application Data\Microsoft\Office\Data\Opa11.dat
  • Office XPC:\Documents and Settings\All Users\Application Data\Microsoft\Office\Data\Data.dat
  If the non-administrative user accounts cannot modify this file, users cannot start any Office 2003 programs or Office XP programs on the computer. The Opa11.dat file and the Data.dat file are hardware specific. Additionally, these files are compiled during installation of Office.

To resolve this issue, use one of the following methods.Method 1

Set the permission for the Everyone group of the registry subkeys that are listed in the error message to Full Control. Use the 'Fix It' and follow the steps provided in the KB article
For more information how to let Microsoft Fix it for you , click the following article number to view the article in the Microsoft Knowledge Base: 313222 (http://support.microsoft.com/kb/313222/ ) How do I restore security settings to the default settings?
Method 2

Disable the third-party application. For example, to disable WebRoot Spysweeper, follow these steps:

1. Right-click the WebRoot Spysweeper icon that is located in the notification area, at the far right of the taskbar.
2. Left-click the Shut Down option.
3. In the Office installation Error 1406 dialog box, click Retry.
4. When the Office setup is completed, restart the computer, and then re-enable WebRoot Spysweeper.

Method 3

Take the system into a "clean boot" state, and then run Office setup. This disables the third-party applications. The third-party application that is denying access to the registry subkey can no longer deny access.

For more information about how to take the system into a "clean boot" state, click the following article number to view the article in the Microsoft Knowledge Base: 310353 (http://support.microsoft.com/kb/310353/ ) How to configure Windows XP to start in a "clean boot" state
The third-party products that this article discusses are manufactured by companies that are independent of Microsoft. Microsoft makes no warranty, implied or otherwise, about the performance or reliability of these products.Method 4

Some activation problems indicate that the license file is corrupted. If the license file is corrupted, you cannot resolve the problem by removing and then reinstalling the Office product. The license file is not removed when you remove the Office product. Additionally, the license file is not overwritten when you reinstall the Office product. Another symptom of a corrupted license file is a failure to successfully pass Office Genuine Advantage validation. If the license file is corrupted, use one of the following methods to delete the license file.


Got this off the Microsoft website, hope it helps.