Again, unless there is some sort of bug that is specific to Windows ME, and I know very little about Windows ME, at this point about all I know of to suggest is to re-install Windows. You've tried running InstMSI, and it said it was already installed. I assume you've installed the dotnetfx.exe, and that also installs the Windows Installer if it is not present or not the correct version. Since your Windows seems to think the Windows Installer is there, it should at least recognize an msi file even if the msi file is corrupt or not compatible. Since it does not the only thing I can assume is that your Windows Installer service is corrupted somehow, and I know of no way to repair it other than a complete OS reinstall. Sorry I cannot be more helpful.
