It sounds like one of two things:
1. The installation files were not completely extracted or were not extracted to the proper folders. Solution: Extract the files from the .ZIP again to a new folder and ensure there is a folder structure (not just a single folder.)
2. The installation was not run as an administrator on the machine. Solution: Run the setup.exe as an admin.
If you continue to experience problems, please enter a ticket with Support: http://support.oracle.com/
Try uninstalling any existing MSXML files from control panel. This worked for me.
I just solved this error . It was pretty hard to solve.
I did uninstall the MSXML , but it did not help. The problem was , there is a installer for MSXML in third party folder and they all are run silently and this installer for MSXML was failing.
C:\Data\p13257712_361_WINNT\UPK_v3.6.1\third party files
Microsoft WSE 3.0 Runtime.msi
This installer was looking for F:\ drive, on my computer. There is no F:\ drive and it failed, but untill I ran this msi , manually , i could not figure out the issue
Once I created a Fake F:\ drive, installed this installer manually and then re-ran the UPK 3.6.1 installer , it all worked out fine.
So my take, is that the this Microsoft WSE 3.0 Runtime.msi, installer is looking for F:\ drive which is missing and that is the root cause of this error message.