I was having the same problem with Sp1. I found that the install directory can not have any spaces at all. You should notice that t installation folder for SQL has underscores instead of spaces, the path to this directory must not have spaces as well. So if you place this in a folder on the c: drive called "install folder", for example, then replace the space with an underscore or remove it. So the old would be c:\install folder\sqlinstall and the new path would be c:\install_folder\sqlinstall. This should fix the error.