You probably have NTFS permission errors or something like that. The best solution is not installing that component. It's a completely useless thing no one uses. (If you have a certain type of mobile media player, drag&drop copying video files to it will initiate hardware accelerated encoding to the format the device likes...)
So. Use custom install (you should anyway) and unselect that component. See if you can go on with the installation.
CPU: AMD Phenom II X4 810 @ 3120MHz | RAM: Kingmax 2x2GB DDR2 800 @ 833MHz| MoBo: MSI K9A2 CF v1.0 (BIOS: 1.D)| GPU: Asus HD 6850 1024MB (DirectCu) @ 835/1135MHz | Display: L24FHD | PSU: PC Power & Cooling Silencer 750 Quad | OS: MS Windows 3.11 Pro x64