iTunes 6 - Error 1607 - Solution
Error -1607: Unable to Install InstallShield Scripting Runtime
Check to see whether you have installed Microsoft Hotfix MS05-051 (KB902400) lately. It can break permissions on COM+ and MS DTC which will cause all kinds of problems with Windows Installer.
I had this exact problem this morning after installing this hotfix.
Here is the Microsoft article that tells you how to fix the permissions:
http://support.microsoft.com/?kbid=909444