I have built a web setup project in VS2008 which installs my ASP.NET/Silverlight app into IIS. This works fine everywhere except on Windows Server 2008.
I get this error
Like the comment, it looks like this could be something COM related. That would lead me to believe that the MSI is using something that is probably specific to IIS 6.
Make sure you have the IIS 6 compatibility options installed with IIS 7 in Windows 2008. That should install the COM components that your MSI is trying to access.
...just a guess of course. Good luck.