Please see the following articles from InstallShield technical support:

INFO: Initialization Error Troubleshooting
http://support.installshield.com/kb/view.asp?articleid=Q104986

ERRMSG: "The Parameter Is Incorrect" while Running Setup.exe
http://support.installshield.com/kb/view.asp?articleid=Q102386

Update to the Latest InstallShield Installation Engines.
http://consumer.installshield.com/kb.asp?id=Q108322

Try temporarily disabling any anti-virus or firewall software you may be using.

Try clearing out your "temp" directory. Here's an easy way to do this:

1. Click the Windows Start button, then click Run
2. Enter %TEMP% and click OK.
3. A Windows Explorer window will open. Delete all the files and folders that it displays.

If your "temp" directory path name is too long, InstallShield may not run correctly. To check and change the path name:

1. Right-click the My Computer icon on your Windows desktop, and select the Properties menu option, or open the System control panel.
2. On the Advanced tab, select the Environment Variables button.
3. In the User Variables list, locate the TEMP variable.
4. Make a note of the path name, then click Edit and change to something shorter, e.g. C:\TEMP (create a folder at this location if necessary).
5. You may need to reboot your computer for the change to take effect.