When I try to install Vista SP2, it fails and gives me the error:
It happens if I try it through Windows Update or with the standalone installation.
Does anybody know how to fix this?
I know you've "solved" this problem by installing Windows 7 instead, but in case anyone comes across this question needing help...
The error you received was that the SMI Primitive Installer was failing. According to PC-Library:
It looks like the process needed to fix this error is to use the Vista Installation DVD to either do a repair or a reinstallation. This problem seems to be deeply rooted in problems with a lot of important Windows .dll files. This user here was able to fix the problem with a reinstallation of Windows, which preserved all his files. As always, don't forget to back up your data while trying to fix this!
This article contains answers to exactly your problem supplied by Microsoft Support :