Pete,
I am having the identical issue, on one of my clients so far.
And can confirm that neither the local or domain Administrator accounts will succeed in installing the SEP 12.1 RU1 client.
In my case, what is different about this machine is that the user did not heed our instructions to reboot when the SEP installer asked him to, and instead the old version managed to reinstall itself at some point later in the day.
My first attempt to resolve the error was to uninstall the old client, and push the new version out from the server, but that did not work. I have also tried extracting the deployment package and installing it that way, but no change in the result there either.
Top Google hit for this error does not apply directly, as this is a 32-bit XP system, and it also claims this was resolved in RU 1: http://www.symantec.com/business/support/index?page=content&id=TECH164707
But, I'm wondering if there's something to that.