Hi,
The above issue is a liveupdate issue. Thats the reason SEP is not installing.
1)Un-install Liveupdate from Add/Remove Programs.
Make sure c:\program files\Symantec\liveupdate folder is gone
And manually delete C:\Documents and Settings\All Users\Application Data\Symantec\LiveUpdate
Try installing SEP.
Once SEP is installed RUn this command to register SEPM with Liveupdate
From the command prompt browse to the directory
\program files\Symantec\Symantec endpoint protection manager\bin\
and run lucatalog.exe -update.
2)Now if you are planning to upgrade to mr2mp1 to mr4.there will be no problems all the polcies and communication settings will be intact.
Only the program will be upgraded and all the bugs will be patched.
The only important thing is before Upgrading to MR4 make sure you dont have any client in Global and Temporary group.
As in Mr4 these 2 groups are renamed as My Company and Default.