Hello,
Please try installing the “Windows Install Clean Up” utility that you can find at
http://wle.mx/D23. After installing, launch it from the Start menu. Hold down
Ctrl while clicking any entries starting with “(All Users) Windows Live...” or “Windows Live”. After all are selected, press the
Remove button. Now wait (!), then after all entries are gone, exit the tool. Finally retry to install Windows Live from
http://explore.live.com/windows-live-essentials-xp.
Does this work for you?