I got this error the other day whilst trying to install Reporting services.

After much digging I found this blog entry that fixed it:
http://social.msdn.microsoft.com/forums/en-US/sqlsetupandupgrade/thread/c9cb944d-6264-4530-9e00-ee92da3e939f/

In short the performance counters on the machine were corrupted, so the following command rebuilt them and fixed the RS Install error.

c:windowssystem32lodctr /R

RS was left in a half installed state:

Solution was to run the command above, uninstall, (I removed all SQL Server 2008 components) and re-install from scratch.