Installer leaves VC++ redist files in main folder: We have no influence on the behavior of the VC++ redist module, but we also have no trash in the main folders of our PCs here. Maybe this is caused by something special on that PC, like having an unusual Windows folder location. Can you post a directory listing of c:\? This could give us some idea.
"Damaged application" on XP SP3 - this has certainly nothing to do with XP SP3. More likely is some missing module, however then this should also happen on other people's PCs. If someone else is also getting this error, please don't fix it but contact support. We'll send you some modules for finding out which one is damaged or missing.