installing java gives internal error 2503 and 2502

Check that the Date in the machine is correct.

See if there are Access Permission problems with these Registry Keys also.

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Installer

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Uninstall

minor bug integrating IE7?, nlite 1.2.1
http://www.msfn.org/board/minor-bug-integrating-ie7-t86346.html

http://www.google.com/search?hl=en&rls=com.microsoft%3Aen-au&q=internal+error+2503&aq=0c&oq=Error+2503&aqi=g-c1g1g-c2g2g-c1g1

Have you also tried right-clicking on a Uninstall.exe, or Setup.exe, and choosing the "Run As Administrator" option?

If you type %temp% in the Start RUN box you could clean out all the temp files (that are able to be deleted), Programs dump a lot of files in there with each failed attempt.

How to troubleshoot a problem by performing a clean boot in Windows Vista or in Windows 7
http://support.microsoft.com/default.aspx/kb/929135

How to repair the operating system and how to restore the operating system configuration to an earlier point in time in Windows Vista
http://support.microsoft.com/kb/936212/#appliesto

How do I restore security settings to the default settings?
http://support.microsoft.com/default.aspx/kb/313222#appliesto