The Win 7 computer is in an OU that does not have any GP's applied to it. Here is what I see in the log file.
2012-10-18 14:00:13: Remote Installation Service build (6,0,6074,130), Notification Server build (6,0,6074,130)
2012-10-18 14:00:13: Attempting to start as service.
2012-10-18 14:00:13: Started as service.
2012-10-18 14:00:13: Parsing command arguments. Command line args: -u http://NS Server/Altiris/NS/NSCap/Bin/Win32/X86/NS Client Package/AeXNSC.exe -s oNS Server -w http://NS Server/Altiris/ -nostartmenu -notrayicon -addremove -accUserName Domain\altiris_identity -accUserPassword IM5xrY/df7YLJsshk3WoOw== -n Altiris Agent Installation Service
2012-10-18 14:00:13: Parsed command arguments.
Source URL: http://NS Server/Altiris/NS/NSCap/Bin/Win32/X86/NS Client Package/AeXNSC.exe
Server Name: NS Server
NS Web: http://NS Server/Altiris/
Install Path: (null)
Download Chunk Size: 1024
Download Pause Interval: 25
Show Tray Icon: NO
Show Start Menu: NO
Use Proxy Preconfig: NO
Register Diagnostics: NO
Log Enabled: YES
Enable "Add/Remove": YES
Uninstall: NO
Extra Parameters: (null)
2012-10-18 14:00:14: pdwPort is true
2012-10-18 14:00:14: urlComponents.nPort = 80
2012-10-18 14:00:14: Sending 'Checking Prerequisites: Success' message to 'http://oNS Server/Altiris/'.
2012-10-18 14:00:14: Sending progress update to the NS....
2012-10-18 14:00:14: Unable to read value from registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc\InternetAccessType': The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6601)
2012-10-18 14:00:14: Requirements check:
Required: Windows NT 4.0 Service Pack 4
Detected: Windows NT 6.1 Service Pack 1
Requirements met OK.
2012-10-18 14:00:15: pdwPort is true
2012-10-18 14:00:15: urlComponents.nPort = 80
2012-10-18 14:00:15: Sending 'Checked Prerequisites: Success' message to 'http://NS Server/Altiris/'.
2012-10-18 14:00:15: Sending progress update to the NS....
2012-10-18 14:00:15: Unable to read value from registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc\InternetAccessType': The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6601)
2012-10-18 14:00:15: pdwPort is true
2012-10-18 14:00:15: urlComponents.nPort = 80
2012-10-18 14:00:15: Sending 'Starting Download: Success' message to 'http://NS Server/Altiris/'.
2012-10-18 14:00:15: Sending progress update to the NS....
2012-10-18 14:00:15: Unable to read value from registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc\InternetAccessType': The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6601)
2012-10-18 14:00:15: pdwPort is true
2012-10-18 14:00:15: urlComponents.nPort = 80
2012-10-18 14:00:15: Resolved url http://NS Server/Altiris/NS/NSCap/Bin/Win32/X86/NS Client Package/AeXNSC.exe
2012-10-18 14:00:15: Unable to read value from registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc\InternetAccessType': The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6601)
2012-10-18 14:00:16: Unable to query 'Last Modified Time' value in registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc'. (Note: this error is expected the first time the remote install service starts.): The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 3003)
2012-10-18 14:00:16: Error moving file pointer for reading 'http://NS Server/Altiris/NS/NSCap/Bin/Win32/X86/NS Client Package/AeXNSC.exe' to 0 (80072ef0) (ASWDInstSvc.cpp line: 2084)
2012-10-18 14:00:46: pdwPort is true
2012-10-18 14:00:46: urlComponents.nPort = 80
2012-10-18 14:00:46: Resolved url http://NS Server/Altiris/NS/NSCap/Bin/Win32/X86/NS Client Package/AeXNSC.exe
2012-10-18 14:00:46: Unable to read value from registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc\InternetAccessType': The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6601)
2012-10-18 14:01:16: pdwPort is true
2012-10-18 14:01:16: urlComponents.nPort = 80
2012-10-18 14:01:16: Resolved url http://NS Server/Altiris/NS/NSCap/Bin/Win32/X86/NS Client Package/AeXNSC.exe
2012-10-18 14:01:16: Unable to read value from registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc\InternetAccessType': The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6601)
2012-10-18 14:01:46: pdwPort is true
2012-10-18 14:01:46: urlComponents.nPort = 80
2012-10-18 14:01:46: Resolved url http://NS Server/Altiris/NS/NSCap/Bin/Win32/X86/NS Client Package/AeXNSC.exe
2012-10-18 14:01:46: Unable to read value from registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc\InternetAccessType': The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6601)
2012-10-18 14:01:47: Download failed too many times. Aborting.
2012-10-18 14:01:47: pdwPort is true
2012-10-18 14:01:47: urlComponents.nPort = 80
2012-10-18 14:01:47: Sending 'Finished Download: Failed' message to 'http://NS Server/Altiris/'.
2012-10-18 14:01:47: Sending progress update to the NS....
2012-10-18 14:01:47: Unable to read value from registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc\InternetAccessType': The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6601)
2012-10-18 14:01:48: pdwPort is true
2012-10-18 14:01:48: urlComponents.nPort = 80
2012-10-18 14:01:48: Sending 'Finished Install: Failed' message to 'http://NS Server/Altiris/'.
2012-10-18 14:01:48: Sending progress update to the NS....
2012-10-18 14:01:48: Unable to read value from registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc\InternetAccessType': The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6601)
2012-10-18 14:01:48: Start cleaning the install service.
2012-10-18 14:01:49: pdwPort is true
2012-10-18 14:01:49: urlComponents.nPort = 80
2012-10-18 14:01:49: Sending 'Remote Install Finished: Failed' message to 'http://NS Server/Altiris/'.
2012-10-18 14:01:49: Sending progress update to the NS....
2012-10-18 14:01:49: Unable to open registry key 'HKLM\SOFTWARE\Altiris\AeXSWDInstSvc' to load the settings: The system cannot find the file specified. (80070002) (ASWDInstSvc.cpp line: 6597)
2012-10-18 14:01:49: Altiris Agent installation finished.