For even more information see:
KB2918614 breaks Windows Installer Service - Microsoft Community
It would appear that the problem is not confined to Vista.
If you have automatic Windows updates set on, you will find that KB2918614 gets re-installed on the next boot so you will need to go manual Windows updates
or do the AIR install after a Restart but before any other reboots. Of course you will have to uninstall the update it before you run Windows Installer again.
Lets hope Microsoft fixes the problem with this Windows update soon.