Can't install SQL Express 2008R2- caspol.exe application error - the application failed to initialize

Posted by Nir on Server Fault See other posts from Server Fault or by Nir
Published on 2011-05-04T07:16:29Z Indexed on 2012/06/25 3:18 UTC
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I'm trying to install SQL Server Express 2008 R2 on Windows 2003 Server (enterprise edition).

I get the following error message:

Title: caspol.exe - Application Error

Text: The application failed to initialize properly (0x000007b), Click on OK to terminate the application.

I get the same error message both when downloading the installer and running it and when using the web platform installer.

All the pages on the internet I've found about similar problem say it's a corrupt .net installation issue - This server runs multiple .net apps and I've never had any problems with any of them.

I've uninstalled and reinstalled .net (causing a painful outage) and nothing changed.

Does anyone here has any idea what might cause this?

Update 1: additional information I forgot to include: 32bit version of Windows running in a virtual machine, no anti virus

Update 2: when running caspol.exe from the command line I get the same error

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