Hi,
Does the user have administrator privileges? The above mentioned error is generally seen if the user does not have the administrator privileges or you are running multiple instances of Adobe AIR.
Could you go to run and type regedit. Registry editor will open up. Traverse to HKEY_LOCAL_MACHINE\Sofware\Policies\Microsoft\Windows\Installer and see if DisableMSI key is present. If it is there please check its value and let us know.
Thanks!