This problem initially was discovered during beta testing of office 2007, and thought to be fixed in final version; but it continues to show up here and there; so I think it isn't fully fixed.
The problem becomes immediately apparent after the setup disc is inserted into the optical drive. If you are experiencing a similar problem, these methods may resolve the problem for you.
Method 1
1. Go to Start and then click on Run.
2. Browse to the location where you have the CD.
3. Double click setup.exe.
Method 2
1. Copy the contents of the CD to a network share.
2. Install the software in the machine from the local network.
Method 3
1. Copy the whole installation directory on your hard disk.
2. Locate osetup.dll from another software on your CD.
3. Copy that osetup.dll.
4. Replace your non-working osetup.dll with the copy you just made.
Method 4
Do a search for a file called "gdiplus.dll" in c:\windows\*.*
Once found copy the file to c:\windows
Try install again.
Let me know if you need further help. Regards & Good luck