Update:
I cannot reproduce original problem with error "unable to create or write to the output file" after several install-uninstall sequences of TS and Altiris agent.
I can reproduce problem with TS functionality, if TS web-directory removed manually after TS uninstall, but it seems like this is a different issue.
Currently there are three most common issues with the TS install in the field:
1. TS setup process from previous install stays in running state and blocks new install, even new package cannot be downloaded. Computer restart and new schedule for the TS install policy should help in such case; issue fixed in 7.5.HF5.
2. IIS Appool used by TS modified: switched to "Integrated mode" or switched to Framework different from 2.0 or "Enable 32-bit Application" set to "True". In 7.5.SP1 TS will create and configure its own appool.
3. Already mentioned problem with manual removal of IIS ClientTaskServer directory after TS uninstall and before the new install. In such case TS installed but non-functional until corresponding web-directory re-created manually and atrshost service restarted. Fixed in 7.5.SP1.
Sometimes issues with file creation could indicate problems with HDD, so it could be worth to run scandisk on a server.
Thank you,
Alex.