Examining irishrons last link I came up with some interesting info regarding MS games: http://support.microsoft.com/kb/910816

Now this doesn't specifically relate to M2 or Kingdoms but does point out that Installshield can be corrupted. Furthermore it lists a fix/work-around that might prove useful.

Now none of this is new to either irish or myself but it might help you beat this problem. Let us know what you decide to do. Good luck!