When I look at the logfiles it seem to fail on the .NET 2.0 install.
Be sure to install as administrator and avoid running antivirus software and similar that might want to check files while you install.
Make sure you have windows installer installed http://www.microsoft.com/downloads/details.aspx familyid=889482fc-5f56-4a38-b838-de776fd4138c&displaylang=en
Try to install .NET separatly, either from windows update or download http://www.microsoft.com/downloads/details.aspx FamilyID=0856eacb-4362-4b0d-8edd-aab15c5e04f5&displaylang=en
Did you have any VS2005 or .NET 2.0 betas installed Then you might want to clean your system. http://blogs.msdn.com/astebner/archive/2005/10/27/485987.aspx
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