Hmmm... i went through the log file, and it was quite verbose to say the least. Yes there were no real problems that would cause the installation to fail, but perhaps there are some prerequistes for the install.

Ensure you have Admin rights - even better would be to log in as 'Administrator' and try the install. Ensure you have .NET framwork 1.1 sp 2 (?) installed, run windows updates to see if there any windows components updates (like the ones when first installing Visual Studio .NET 2003).

Did this install process, uninstall the partial files? Check add/remove programs, and ensure that MSSQL server or MSDEngine is removed.

Hope it works out.