okay, although the 7.0.x and 7.1.x itunes and QuickTime installers are not InstallShield-based, earlier versions were. so the installer needs the InstallShield engine to uninstall the older version.
so let's make sure you've got an InstallShield engine
version 11 on the PC, as per the following InstallShield document:
Update to the Latest InstallShield Installation Engines
... any better luck with an iTunes install with a version 11 engine in place?