Can not install Microsoft SQL Server 2005 Express on Dell OS image of Vista Ultimate

Microsoft SQL Server 2005 Express edition installation on original Dell OS image of Vista Ultimate SP1 fails with the error:

2009-05-30 11:57:06.50 spid51      Error: 17750, Severity: 16, State: 0.
2009-05-30 11:57:06.50 spid51      Could not load the DLL xpstar90.dll, or one of the DLLs it references. Reason: 14003(error not found).
2009-05-30 11:57:06.50 spid51      Error: 14658, Severity: 16, State: 1.
2009-05-30 11:57:06.50 spid51      Failed to retrieve SQLPath for syssubsystems population.
2009-05-30 11:57:07.52 spid5s      SQL Server is terminating in response to a 'stop' request from Service Control Manager. This is an informational message only. No user action is required.
2009-05-30 11:57:07.52 spid5s      SQL Trace was stopped due to server shutdown. Trace ID = '1'. This is an informational message only; no user act

I am not sure what is the problem here but as a work around I just reinstalled Vista from Dell CD (clear Vista installation without Dell preinstalled software and customizations) and then installed SQL Express without any problem.

I've noticed that Dell OS image of Vista includes Microsoft SQL 2005 Compact - shouldn't be a conflict with express, however may be some Dell custom settings related to this installation will affect Express.

Anyone having similar problem?

BTW: it is brand new Studio Hybrid with Vista Ultimate SP1.