The issue lies with liveupdate. you need to use dcomcnfg to change some permission on the liveupdate engine. Here is the procedure:
Delete the following folders (if they exist):
C:\Program Files\Symantec
C:\Program Files\Symantec Antivirus
C:\Documents and Settings\All Users\Application Data\Symantec\LiveUpdate
Shutdown the Windows Installer service and then re-register it.
In the Run box, type msiexec /unreg, and then click OK
Next the DCOM permissions should be changed to their default settings:
To Change DCOM permissions:
On the Windows taskbar, click Start > Run.
Type the following: dcomcnfg.exe
Click OK.
Perform one of the following:
Expand Component Services, and then expand Computers. Right-click My Computer, and click Properties. On the Default Properties tab, on the Default Impersonation Level menu, click Identify.
Click OK.
Restart the server.
Re-register msiexec (Start > Run > msiexec /regserver)
Attempt the installation again and confirm that it now installs properly.
Hope this helps.
Martial.