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My OS is WIN2000, here is what I did to fix error-1603:
1. right click c:/Documents and Settings/your-folder/Local Settings
2. Properties->Security->Add
3. Add user "SYSTEM", and enable "Full Control" permissions to it
4. Apply above change
5. re-install MSN Messenger 6.1, it worked now
Note: actually, I added user "everyone", after installation, i just removed it from the user list.
Good Luck
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