A 1603 error is usually a problem with .net versions from what i can find in the MS knowledgebase. Most people suggest uninstalling .net and then installing the latest (3.5 SP1 i think).
Can you upload a copy of that log file somewhere? It might have some more clues, try searching for "error" in the file and i bet you find something about .net being missing
Yeah, well you know the problem actually. Remember, On MSN, I told you that my .NET Framework was not working, and we tried to uninstall, it, but it would not do it. And here is the file
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It is failing to register components. MDAC 2.8 SP1 is required for mssql2005 and that is one i didn't think of before.
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This one has many causes from the googling i have done but they are almost all .net related. Exactly which .net versions show up in your add/remove option in your control panel?