Setup.exe won't run

Run Process Monitor. Filter for setup.exe. Compare what happens when it terminates with an example that works correctly.

Interesting question :)

Are you sure that computer can run other installers, and that the problem is not windows installer itself?

Also, sometimes you can extract the setup files from certain installers. Then you will get a new setup file that doesn't have the preferences (silent, no interaction) set to it, as the parent installer has. Check if you can extract files from the installer with an unzip tool like WinRar or Universal Extractor.

It might be worth a shot to check if all system files are correct. Hit windows key + R, type 'cmd'. Then in the newly opened dos venster type 'sfc /scannow'.

Finally you might try running the setup.exe in safe mode. See if that changes anything.

Kill the setup.exe process in the task manager and then try rerunning it. Sometimes you get a "zombie"* process that's launched but for whatever reason bugs out and doesn't load correctly, preventing a new one from starting, and doesn't go away by itself.

*Note: I'm using "zombie" in a colloquial sense. "Zombie" processes are real things in OS terms, but I am not certain of what state these processes are in.