XP SP2 installshield - corrupt package message

Install shield gone mad under XP SP2.

I have been happly using my PC for non-techy activities
for about three weeks since opting to drop the SP2 update
CD into my drive. However this week came the test when I
wanted to install some more software...

I tried all week to install downloaded software from SONIC
MYDVD no chance. Tonight I try some other products and I
always get the same annoying message "The contents of this
file cannot be unpacked" claiming a corruption.
Independent Checksum of the exes shows them to be okay.

I have tried the following to no avail.

1) Regress to XP SP1 checkpoint - restore point. No
difference...
2) Uninstall XP SP2 - uninstall broken.
3) Copy and delete the "Program Files\Common
Files\InstallShield" directory + download an install new
version - no effect
3)Redelete the directory and replace with none - no effect.

Anyone got any other ideas please?

David