"The older version of Apple Software Update cannot be removed"
To install the utility, doubleclick the msicuu2.exe file you downloaded.
Now run the utility ("Start > All Programs > Windows Install Clean Up"). In the list of programs that appears in CleanUp, select any Apple Software Update entries and click "Remove", as per the following screenshot:
Quit out of CleanUp, restart the PC and try another iTunes install using an iTunesSetup.exe (or iTunes64Setup.exe) downloaded from the Apple Website:
Does it go through properly this time?