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"We are unable to create or save new files in the folder in which this application was downloaded"

I am experiencing big problems trying to install Windows 7 onto my laptop. I will try and be as clear as possible in explaining.

My laptop is currently running Windows Vista Home Premium 32-Bit. I have purchased the Windows 7 Professional 64-Bit Upgrade from the Microsoft Student Offer.

I was led to believe that upon downloading, I would get an .ISO file, which I would then burn to a DVD. Then I would boot from this DVD and do a clean/custom install.

This has not been possible. Upon downloading from the Microsoft Student Website, I get 3 files. These are:

Win7-P-Retail-en-us-x64.exe

setup1.box

setup2.box

I double click on "Win7-P-Retail-en-us-x64.exe" and I get the message "Unloading the Box". Once the status bar reaches the end, I get the following error:

"We are unable to create or save new files in the folder in which this application was downloaded. Please check the folder properties to make sure that you have security
permission on the folder to write files and that the folder is not read-only".

I click on OK. Regardless of the fact that I received the above error message, I now have a new folder called "expandedSetup".

Within this folder are lots and lots of complicated looking files, stored within many other sub folders.

However, in the root of "expandedSetup" is a file called "setup.exe". I double click on this file, and I get the following error message:

"The version of this file is not compatible with the version of Windows you're running. Check you computer's system information to see whether you need an x86 (32-bit)
or x64 (64-bit) version of the program, and then contact the software publisher".

This is as far as I have managed to get. I cannot find an .ISO file anywhere within the download, so I am unable to make a bootable DVD.

Please can anyone advise me on how to successfully install Windows 7 Professional 64-Bit onto my laptop using the download that I have purchsed.

Thank you very much in advance :)
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* * SOLUTION * *

There is a way to create an image file dispite recieving this error we seem to be all recieving.

1. You will need to use an additional Microsoft command-line tool, called Oscdimg.
    Details here
    Download here
   
    Download the .zip file and extract it. Then cut and paste the Oscdimg.exe file into your C:\Windows\System32 directory
 
 
2. You now need to start up your command prompt, which can be done by Start->Run then enter 'cmd' into the prompt. (Run as administrator if in Vista!)


3. You should now have the command prompt open, now you need to use the Oscdimg tool to create the image, by entering the following:
   Oscdimg.exe -u2 -bC:\<YOUR DIR> \expandedSetup\boot\etfsboot.com -h C:\<YOUR DIR> \expandedSetup C:\<YOUR DIR> \Win7.iso

 For example: Oscdimg.exe -u2 -bC:\Users\James\Downloads\expandedSetup\boot\etfsboot.com -h C:\ Users\James\Downloads \expandedSetup C:\ Users\James\Downloads \Win7.iso
  
   It will now scan the source tree then begin creating the image. PLEASE note: you must replace '<YOUR DIR> ' appropriatly as to where you have downloaded the files.


4. You should now have an image file, called Win7.iso, in the same directory.


5. You can now burn this .iso file to a blank DVD using appropriate software. I personally use PowerISO (You dont need the paid version to burn the image)


6. Viola! You have your not so shiney Windows 7 disk. Restart your computer and install away!



- I take no acknowledgment for this, I dug about and found the info at: http://www.sevenforums.com/general-discussion/30470-make-bootable-iso-student-d-l.html
  Thanks SIW2 :)
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SUCCESS!

I managed to get it to unpack completely without any problems and as I downloaded this last night at 11pm (just finished the last 10% now)  the following is what I did to get it to work-

Notes-  This is on a 32 bit Vista Home Basic Laptop-  I have turned off my anti-virus and my firewall before doing the following-

Pre Step-  Create a folder in the following directory-  C:\users\yourname - example for me is "C:\Users\Sir_Vikin\win 7"

now follow the rest-

STEP 1-  Download the DLMWin7.exe  application but do NOT run it yet.
Step 2- Right click the DLMWin7.exe - select Unblock
Step 3- Under the compatibility tab select the bottom box-"Run this program as an administrator" Click "Ok" to close
Step 4- Right click the DLMWin7.exe file and select run as administrator
Step 5 - Download the files to the folder you created  example- "C:\Users\Sir_Vikin\win 7"
Step 6- Run it, it should unbox completely!

I am now installing it..
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I don't claim great expertise on this, but as I understand it, there are two problems with your upgrade path.

The first is that to "upgrade" to Win 7 professional requires you to have Vista Business installed (see http://technet.microsoft.com/en-us/library/dd772579%28WS.10%29.aspx).

Secondly, it's not possible to upgrade from a 32 bit version to a 64 bit version (see http://windows.microsoft.com/en-us/windows7/32-bit-and-64-bit-Windows-frequently-asked-questions)

You may be able to do a clean install, though this is not clear to me
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I am in the same position as the OP.

The problem is not with the actual install process itself, for which I understand that as you suggest a clean install would be required.  The problem is before the install is launched, as the error message is received when unpacking the downloaded file.
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i am having the same problem.....
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Same problem as the OP. Downloaded the files from Digital River, and have:

Win7-P-Retail-en-us-x64.exe

setup1.box

setup2.box

I double click on "Win7-P-Retail-en-us-x64.exe" and I get the message "Unloading the Box". Once the status bar reaches the end, I get the following error:

"We are unable to create or save new files in the folder in which this application was downloaded. Please check the folder properties to make sure that you have security
permission on the folder to write files and that the folder is not read-only".

I can double-click on the setup.exe in the "expandedSetup" folder, but I get an error telling me that it is not a valid Win32 application.
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So i downloaded win7 installation, wasn't an iso as i expected. Nonetheless, i tried to run the exe that was attached and at the very end of unpacking the 2 setup boxes, an error message pops up saying " We are unable to create or save new files in the folder in which this application was downloaded. Please check the folder properties to make sure that you have security permission on the folder to write files and that the folder is not read-only." Needless to say, im running as administrator, downloaded the files to my desktop, then to a new folder, i have every permission possible. I also tried to transfer it to another computer to see if it can unpack it but to no avail. Same problem there. Anyone have any suggestions. Im currently re downloading it as i type this. It probably wont help much so has anyone else run into this problem?
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I have the same problem. Maybe the Digital River files are corrupted?
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lets try to get as many common factors as possible to narrow down the souce of trouble.
Im running winxp 32 bit and downloaded the file from Digital River.
I also tried to unpack the files on my vista 32 bit..... same error.
So far it looks like its a 32 bit error thing, pretty sure.
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Is there somewhere we can just download the DVD image and use the key in the e-mail to install?

I'm running XP 32 bit professional and bought 7 64 bit professional.
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I'm running 32 bit vista home premium and attempting to upgrade to 64bit 7 professional, as i understand it this can be done with a custom installation. However i am getting the same error as the OP
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See laius below
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