Web Designer Tools can fail to install during VS Orcas beta 1 setup on 64-bit Windows

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When Visual Studio Codename Orcas beta 1 was initially released back in April, I posted this item about a possible failure during the installation of the Microsoft Web Designer Tools prerequisite component.  That failure was caused by a leftover beta version of Microsoft Office 2007 that was still installed on the system.  Since then, I have heard from a couple of other customers who have run into failures during the installation of the Web Designer Tools component, but who did not have any beta versions of Office 2007 on their system.

Description of the problem

Thanks to the Office setup team here at Microsoft, we were able to track down one of the possible root causes.  The Office 2007 setup engine (which is what the Web Designer Tools component uses behind the scenes) shipped with a known compatibility issue on the 64-bit version of Windows Server 2003.  If you attempt to install a product that uses the Office 2007 setup engine on a 64-bit Windows Server 2003 system with Terminal Services installed and configured in relaxed security mode, the setup may fail.

How to diagnose the problem

In this type of scenario, the log file for Web Designer Tools package, which is located at %temp%SetupExe(########).log, shows an error like the following:

Loaded Dll : c:\1bfe3344c2af996d3f660b\visualwebdeveloper.ww\OSETUP.DLL.
Catalyst version is : 12.0.4518.1014
JobExecutionMode is InstallExecutionMode.
Error: failed MsiEnumProducts ErrorCode: 2(0x2).
Catalyst execution finished: 05/01/2007 12:34:56. Return code: 30015. Exception caught: ErrorCodeOnly.

How to workaround the problem

The Office team has published a knowledge base article at https://support.microsoft.com/kb/927476/en-us that describes how to workaround this issue.  This knowledge base article describes how to enable full security mode for Terminal Services on Windows Server 2003.  It also lists an alternate registry-based workaround that can be used in case the Terminal Services security mode cannot be changed on your system for some reason.