I had just reformatted and I made a C:\ drive for programs and windows and a D:\ drive for games.

I had made the mistake of installing steam to D:\ and not D:\Steam\ so all the steam files were clustered in the D:\ drive. So I went into program files and uninstalled it for a second go at installing it to the right location. That's when during the installation I had received this error.

"ERROR 1303: THE INSTALLATION HAS INSUFFICIENT PRIVILEGES TO ACCESS THE DIRECTORY..."

I had tried many many things... Only one worked. I had to reformat the D:\ drive!

Luckily nothing was on it so if you have files back them up. Go to my computer and left click the D:\ drive and click format.

A (possible) fix for anyone with this problem, if your installing Steam on a slave drive or new hd.

-open Windows Explorer
-right click and choose properties
-click on Security tab
-under Group or User names, add Administrators & SYSTEM. Make sure both have full control. (make take a few moments on each one.)
-after both now show in Group or User names, click on Advanced near the bottom.
-make sure Administrators & SYSTEM now show there aswell.
-click on Owner tab.
-click Administrators and check the box (Replace owner on subcontainers and objects)and apply.
-Try your install again.

Good luck