Error code 0x80070001 on Windows Server 2008

I've been struggling to get Windows Server 2008 running on a virtual machine. I use VMplayer and want to install Windows Server 2008 Database and Enterprise from MSDN AA. The server is running now but I cannot install MS SQL server.

I have installed IIS. When I started to install MS SQL I receive the following error:

0x80070001 Incorrect function

The error suggests that Windows Installer 4.5 needs to be installed. However when trying to do this I get the following Windows Update error:

0x800B0100

Any help? Thank you.

EDIT

Setup now starts but I get the following error:

Does this mean that the file is corrupt?

Try to reboot the VM and try again.
If it still happens, make sure that the Windows Server is fully patched and reboot again before trying.

Some information that I managed to find on the problem:

sql_engine_core_inst_loc.msi installer error

I don't know what did it work, but I did this two things and I finish the installation:

1. Disable the Windows Firewall
2. Copy the CD to a local folder (eg. C:\Users) and run setup.exe from there.

The explanation why it worked for the above quote is probably here:
Installing SQL Server 2008 R2

The SQL Server install is not very tolerant of slow drives or slow systems. There are numerous timing tests done during the SQL Server install process and if one of these fails due to nothing more than a slow system then your install fails.

I have seen a number of failures to run a msi file that were due to the install media being on a (slow) network drive. Other failures have been due to a slow virtual server, where either services did not start within the expected time or msi files did not complete their work within the expected time.

In conclusion:

1. Turn off the firewall in the VM and try again.
2. If this doesn't work, the media on which is stored the Sql Server .iso might be too slow, or the VM itself is too slow. You need to improve the speed of the installation process. Maybe giving the VM more memory will help.
3. Download the .iso again, in case it is corrupted.