The TechNet forum post Windows Installer Crash appears to have find a workaround for the issue by using

start regedit
navigate to HKLM\Software\Microsoft\SQMClient\Windows\DisabledSessions
rename MachineThrottling to _MachineThrottling

Original credit for the workaround was attributed to http://chris123nt.com/2009/01/18/sqm-client-causing-crashing-in-windows-7/