Here are three options you can try (found here):
1) Are you using Skype? If you are, remove it completely, install
Office and then install Skype again. This usually fixes the problem.
2A) Open the parent folder manually that the installer cannot find.
When you get the error, use Windows Explorer to find the parent folder
of the folder that contains the missing file. Run the Office install
again. Repeat this step if you get any more files not found. Leave
them open in separate Windows Explorer windows until Office is
installed.
2B) Open the files manually that the installer cannot find. When you
get the error, use Windows Explorer to find the file and open it
manually. Leave it open and run the Office install again. Repeat this
step if you get any more files not found. Leave them open until Office
is installed.
3) Edit the registry. This is the last option and care should be
taken not to break your machine. I take no responsibility for any
changes you make to your computer (either in this step or the previous
ones). To edit the registry click on START, then RUN ... In the box
that appears type REGEDIT and click OK. Browse down the following
path:
HKEY_LOCAL_MACHINE > SOFTWARE > MICROSOFT > OFFICE
Delete the keys (items) you find in the OFFICE folder but not the
sub-folders. This removes traces of previous installs to avoid
possible conflicts when installing the new version of Office.
Then browse into:
HKEY_LOCAL_MACHINE > SOFTWARE > MICROSOFT > OFFICE > DELIVERY >
SOURCEENGINE > DOWNLOADS
Delete the keys (items) you find here.
